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Family Ties and Underground Economy

Author

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  • Mare, Mauro
  • Motroni, Antonello
  • Porcelli, Francesco

Abstract

This paper reports empirical evidence supporting the hypothesis that family ties should be listed among the causes of tax evasion. In societies where the power of the family is very high, the quality of public institutions tends to be low. This connection shapes the behavior of taxpayers and generates underground economy. The econometric analysis is based on linear panel data models, and a new dataset that combines data on personal values, social capital, and tax morale, in combination with an index of the shadow economy. The final results show that countries where family ties are stronger also exhibit higher underground economy.

Suggested Citation

  • Mare, Mauro & Motroni, Antonello & Porcelli, Francesco, 2016. "Family Ties and Underground Economy," MPRA Paper 76059, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:76059
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    Cited by:

    1. Anastasia Latina & Dimitrios Varvarigos, 2020. "Corruption and the Cultural Evolution of Family Ties," Discussion Papers in Economics 20/04, Division of Economics, School of Business, University of Leicester.
    2. Litina Anastasia & Varvarigos Dimitrios, 2023. "Family Ties and Corruption," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 23(1), pages 195-222, January.
    3. Colin C. Williams, 2014. "Confronting the Shadow Economy," Books, Edward Elgar Publishing, number 15370.

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    More about this item

    Keywords

    family ties; tax evasion; corruption; panel dat;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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