How Long Does the Impact of Corruption Persist? Evidence From Self-Reported Tax Morale by Multi-Generational Immigrants

• In Event: Tax Evasion, Corporate Behavior, and Norms

Abstract

This paper examines the lasting impact of corruption on individual tax morale by analyzing variations in corruption levels across immigrants’ countries of origin. Using data on first- and second-generation immigrants, it finds that first-generation immigrants from highly corrupt countries exhibit lower tax morale in their destination countries, while this effect disappears for the second generation. This suggests that corruption’s influence persists for up to a generation but does not fully transmit across generations. While local corruption and destination-country institutions broadly shape tax morale, home-country corruption continues to affect first-generation immigrants’ fiscal behavior. The findings indicate that cultural norms, rather than institutional trust, drive this persistence. Even when corruption is eradicated or individuals move to better-governed environments, trust in the fiscal contract does not immediately recover. The study highlights the need for cultural policy interventions to disrupt the cycle of corruption and improve tax compliance.

Author

• Abu Bakkar Siddique, Florida Atlantic University