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 cheating benefits and deterrence. By comparing migrants and remainers within locality × biennium cells we then illustrate the tendency of Italians to sort them- selves across geographic areas according to their honesty. Overtime, this tendency has modified the average honesty in each locality, with relevant consequences for the distribution across geographic areas of outcomes like human capital, produc- tivity, earnings growth and the quality of local politicians and government.