Tax evasion and well-being : a study of the social and institutional context in Central and Eastern Europe
Title: Tax evasion and well-being : a study of the social and institutional context in Central and Eastern Europe
Citation: European journal of political economy, 2016, OnlineFirst
ISSN: 1873-5703; 0176-2680
The paper examines the relationship between tax evasion and individuals’ well-being by using a subjective question on life satisfaction in fourteen Central and Eastern European countries. The paper focuses on the role of institutions and social capital in molding this relationship. The results indicate that evading taxes is negatively associated with individuals’ life satisfaction. This negative relationship seems to be shaped by a positive perception of formal tax-related institutions and a high level of formal social capital. A similar analysis run for two generational groups, distinguished in terms of whether having had working experience during communism, yields further interesting results: while associational engagement (i.e. formal social capital) has a crucial role to the younger generation in the way they experience the relationship between evading tax and how satisfied they are with their life, for the older generation it is their social networks (i.e. informal social capital) that shape this relationship.
Received 30 June 2015. Received in revised form 13 September 2016. Accepted 19 September 2016. Available online 20 September 2016
Type of Access: embargoedAccess
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