Abstract
We conduct a field experiment on formalization and subsequent tax compliance of informal entrepreneurs in Rio de Janeiro favelas. Providing in-person one-on-one training with the offer of one-on-one assistance with the formalization process increased information levels about the program, intention to formalize, formalization, and subsequent tax compliance. Providing essentially the same information and assistance via instant messaging produced similar effects on knowledge and intention to formalize, but no effects on formalization itself.
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