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

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Maris Vainre
Laura Aaben
Alari Paulus
Helleka Koppel
Helelyn Tammsaar
Keiu Telve
Katre Koppel
Kaia Beilmann
Andero Uusberg


Payroll taxes, Field experiment, Behavioral insights, Nudges


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 compliance in Estonia’s construction industry. First, we used anthropological methods to gain insights into the decision 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 perceived 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< .0001) and was therefore effective. It remains unclear which constituent nudges of our compound intervention were crucial for this effect. These findings suggest that the compound intervention approach may be a feasible avenue for designing effective interventions in under-studied contexts.