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Nudging towards tax compliance: A fieldwork-informed randomised controlled trial

Author

Listed:
  • Maris Vainre

    (Praxis Centre for Policy Studies)

  • Laura Aaben

    (Praxis Centre for Policy Studies)

  • Alari Paulus

    (Institute for Social and Economic Research, University of Essex & Praxis Centre for Policy Studies)

  • Helleka Koppel

    (Center for Applied Anthropology of Estonia)

  • Helelyn Tammsaar

    (Center for Applied Anthropology of Estonia)

  • Keiu Telve

    (Center for Applied Anthropology of Estonia)

  • Katre Koppel

    (Center for Applied Anthropology of Estonia)

  • Kaia Beilmann

    (Center for Applied Anthropology of Estonia)

  • Andero Uusberg

    (University of Tartu)

Abstract

Changing complex behaviors such as tax evasion may require several behavioral interventions, or nudges. We developed a tailored compound intervention approach to increase employers’ payroll tax compli-ance in Estonia’s construction industry. First, we used anthropological methods to gain insights into the deci-sion processes of employers and employees in the industry (Study 1, N=16). These insights were combined with behavioral decision-making principles to design an intervention e-mail with the aim to strengthen per-ceived risks and weaken descriptive norms of non-compliance as well as to strengthen collaborative and weaken adversarial construal of tax authority. The compound intervention was tested using a three-armed non-blinded randomized controlled trial (Study 2, N=4770) involving all employers whose declared wages were below 70% of the industry’s average. The intervention significantly increased declared payroll taxes by 5.1% to 6.1% on average across the two treated groups over a 3-month follow-up period (p

Suggested Citation

  • Maris Vainre & Laura Aaben & Alari Paulus & Helleka Koppel & Helelyn Tammsaar & Keiu Telve & Katre Koppel & Kaia Beilmann & Andero Uusberg, 2020. "Nudging towards tax compliance: A fieldwork-informed randomised controlled trial," Journal of Behavioral Public Administration, Center for Experimental and Behavioral Public Administration, vol. 3(1).
    • Handle: RePEc:bpd:articl:v:3:y:2020:i:1:jbpa.31.84
    DOI: 10.30636/jbpa.31.84
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Migchelbrink, Koen & Raymaekers, Pieter, 2023. "Nudging people to pay their parking fines on time. Evidence from a cluster-randomized field experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 105(C).
    2. Oliver Nnamdi Okafor, 2023. "Shaming of Tax Evaders: Empirical Evidence on Perceptions of Retributive Justice and Tax Compliance Intentions," Journal of Business Ethics, Springer, vol. 182(2), pages 377-395, January.
    3. Miaba Louise Lompo & Marie Madeleine Ouoba, 2024. "Taxes and social instability: How large corporations and wealthy taxpayers hide taxable money?," Economic Analysis Letters, Anser Press, vol. 3(1), pages 36-45, March.
    4. Saulitis, Andris & Chapkovski, Philipp, 2023. "Investigating Tax Compliance with Mixed-Methods Approach: The Effect of Normative Appeals Among the Firms in Latvia," MPRA Paper 116560, University Library of Munich, Germany.
    5. Lompo, Miaba Louise & Ouoba, Marie Madeleine, 2022. "How they hide money? An investigation on tax evasion of large corporations and wealthy taxpayers," MPRA Paper 114235, University Library of Munich, Germany.
    6. Lompo, Miaba Louise & Ouoba, Marie Madeleine, 2022. "How they hide money? An investigation on tax evasion of large corporations and wealthy taxpayers," MPRA Paper 113410, University Library of Munich, Germany.

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    More about this item

    Keywords

    Payroll taxes; Field experiment; Behavioral insights; Nudges;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • Z00 - Other Special Topics - - General - - - General
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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