Behavioral Interventions, Tax Compliance and Consequences on Inequality

Author : Darius Deparade, Lennart Jarmolinski, Peter N.C. Mohr

Abstract :Tax evasion is associated with high social and fiscal costs. Given their low implementation costs and high potential efficiency, many governments employ behavioral interventions. Although many studies report positive effects of behavioral interventions to combat tax evasion, the effect sizes are often quite small. This may result from the partial cancellation of heterogeneous effects, prompting calls in the literature for individualized or group-tailored interventions. While classification approaches for taxpayer types exist, their practical implementation is challenged by limited data availability. We systematically review 144 studies conducted between 1996 and 2024 to show that grouptailored interventions along key inequality dimensions—gender, income, age, and regionality—may not only enhance tax compliance but also help address inequality. Furthermore, our heterogeneity analysis shows that intervention effectiveness can be enhanced by incorporating specific characteristics related to framing, intervention frequency, and communication channels. Finally, we present a theoretical model to support group-tailored interventions, providing policymakers with an efficient strategy to combat tax evasion.

Keywords :Tax Compliance, Behavioral Intervention, Heterogeneity, Inequality.

Conference Name :International Conference on Behavioural Economics and Public Policy (ICBEPP-25)

Conference Place Geneva, Switzerland

Conference Date 23rd Apr 2025