On the origins of dishonesty: From parents to children

VoxEU – CEPR Policy Portal, February 23, 2015

Dishonesty is a widespread and multifaceted phenomenon – every day, the news brings reports of corporate dishonesty generating millions of dollars of costs to society. These public scandals, however, account only for a small part of dishonesty in society. Many ordinary people who consider themselves honest nevertheless sometimes cheat on taxes, steal from the workplace, illegally download music from the Internet, or use public transportation without paying the fare. The social cost of small-scale dishonesty is surprisingly large. As Dan Ariely summarises in a recent article, the ‘tax gap’ – the difference between what the IRS estimates taxpayers should pay and what they actually pay – exceeds $300 billion annually; and employee theft and fraud is estimated at $600 billion a year in the US (Mazar et al. 2008).