Abstract:
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While the determinants of tax morale have been widely studied in the literature, surprisingly,
the fundamental influence of education on tax morale has yet to be investigated. Given the
insights in the psychological and political science literature about the role of education in the
formation of social values, in this paper, we analyze two channels through which education
shapes tax morale. We find that while the tax morale of individuals that are net receivers of
welfare state benefits increases with their educational level, it decreases with educational level
among those who are net contributors. Furthermore, our results indicate that the more highly
educated, who have been shown to be better able to assess information in the media on public
affairs, exhibit higher levels of tax morale in countries that have better quality public services,
a fairer tax system and more transparent institutions.
JEL classification: H26; H52; I25
Key words: Tax morale; Tax compliance; Education; Welfare state benefits; Trust in public
institutions |