Emigration or Tax Evasion?: Solutions for Portuguese to Escape from Its Economic Crisis

In last three years, Portugal was affected by a financial crisis, which largely increased the unemployment rate, and decreased social conditions of citizens. Emigration and tax evasion were two of the typical strategies that the Portuguese used to solve their difficulties. In this context, emigration is a social behaviour associated to the demand for better life conditions in other countries. People move away when they see no hope in their country. As for tax evasion, it is also a behaviour that happens when citizens face unemployment and are overwhelmed by high taxes. This article aims firstly to compare both strategies when it comes to the preference shown by citizens. On the other side, it seeks to replicate the restrictions that the Portuguese Government has in hands. Simulations revealed that the ethical attitude of citizens is a key factor for the choice of each strategy, comparing with other factors. Results also demonstrated that Portuguese Government has an insignificant role on agent’s decision.