Rule Breaking, Honesty, and Migration

Using census data, we study false birth-date registrations in Italy, a phenomenon well known to demographers, in a setting that allows us to separate honesty from the benefits of cheating and deterrence. By comparing migrants leaving a locality with those who remain in it, we illustrate the tendency of Italians to sort themselves across geographic areas according to their honesty levels. Over time, this tendency has modified the average honesty level in each locality, with relevant consequences for the distribution across geographic areas of outcomes like human capital, productivity, earnings growth, and the quality of local politicians and government.