Can Behavioral 'Nudges' Improve Compliance? The Case of Colombia Social Protection Contributions

Produced by: 
Tulane University
Available from: 
October 2019
Paper author(s): 
James Alm
Laura Rosales Cifuentes
Carlos Mauricio Ortiz Niño
Diana Rocha
Financial Economics

The Government of Colombia imposes a variety of taxes that must be paid by individual wage earners, called in their entirety 'social protection contributions'. Since 2007 individual payments have been collected using an on-line mechanism. In order to improve compliance, the Government used a controlled field experiment in which various 'pop-up messages' were sent to individuals when making their on-line payments, as behavioral 'nudges'. We examine the impact of these nudges on individual reporting behavior. We find mixed evidence that these messages increased compliance rates relative to a control group that received a so-called 'neutral' message. However, we also demonstrate that the use as the control group of individuals receiving a so-called 'neutral' message creates considerable bias; that is, the receipt of any message of any type clearly influences behavior. Instead, we show that the appropriate control group should be individuals who receive no message at all.


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