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Tax Evasion, Welfare Fraud, And "The Broken Windows" Effect: An Experiment In Belgium, France And The Netherlands

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Executive Summary

In a series of experiments conducted in Belgium (Wallonia and Flanders), France and the Netherlands, the authors compare behavior regarding tax evasion and welfare dodging, with and without information about others' behavior. Subjects have to decide between a 'Registered' income, the realization of which will be known to the tax authority for sure, and an 'Unregistered' income that will only be known with some probability. This unregistered income comes from self-employment in the Tax treatment and from black labor supplementing some unemployment compensation in the Welfare treatment.

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