Pompeo POttery

Matteo Paradisi

I am an Assistant Professor at the Einaudi Institute for Economics and Finance (EIEF).

My primary research interests are at the intersection of Public and Labor Economics. I mainly work with European administrative tax data.

E-mail: matteo.paradisi@eief.it

My papers

Research

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Working Papers

Countries for Old Men: an Analysis of the Age Wage Gap
We study the increase in the wage gap between under-35 and over-55 workers and its determinants.
July 13, 2021
Career Spillovers in Internal Labor Markets
We document the existence of career spillovers among employees in firms with limited promotion opportunities.

Revise & Resubmit, Review of Economic Studies

October 15, 2019

This paper subsumes some results previously circulated in my job market paper (here)

Firms and Policy Incidence
I study the importance of firms for the passthrough of public policies affecting their employees.

MVPF Estimates featured in the Policy Impacts Library

Product Collections

Work in progress

Audit Rule Disclosure and Tax Compliance (available upon request)

Abstract

We study whether tax agencies can selectively disclose their audit selection criteria to foster voluntary tax compliance. We rely on the Italian Sector Studies, a policy creating salient file-specific discontinuities in the tax audit schedule of small firms and the self-employed. This setting allows us to pursue two empirical strategies, leveraging access to a confidential database of more than 26 million Sector Study files from the 2007-2016 period. First, we set up a structural model to rationalize the substantial bunching responses observed at the featured thresholds, and we estimate the model parameters exploiting local heterogeneity in bunching and tax rates. After reconstructing the prevailing level of evasion in a sensible range of counterfactuals where taxpayers perceive audit risks to be constant, we determine that selective disclosure results in 3.7-7.7% higher mean declared revenues relative to keeping the thresholds secret. Second, we exploit the staggered introduction of a 2011 reward regime that reinforces the initial audit risk discontinuity. In line with our theory, we show that taxpayers who benefit from greater audit exemptions above the threshold tend to reduce their relative compliance, while those originally below the threshold improve it. However, on the net reported profits increase on average by 16.2% in treated sectors over the course of six years. Together, our results suggest that tax authorities can design the release of audit-relevant information to stimulate compliance even among the “hard-to-tax”.

Other publications

Policy Papers

Rewarding compliance: effects of the 2011 reward regime on Italian small businessesRewarding compliance: effects of the 2011 reward regime on Italian small businessesPrepared for the Italian Revenue Agency (Agenzia delle Entrate)

with E. Di Gregorio

Abstract

We study the effects of a unique Italian reform incentivizing voluntary tax compliance among the self-employed and small businesses. Starting in 2011, taxpayers in a growing number of sectors were promised an increase in audit exemptions upon achieving a set of desirable conditions defined by the Revenue Agency. While policy rewards might induce a tax base rise among previously non-compliant filers, curbing audit risks for broad categories of the taxpaying population might prove revenue reducing. Over the first six years of implementation, our event-study analysis of more than 9 million anonymized records reveals a substantial expansion of average declared revenues, total costs, and gross profits, with little heterogeneity across macro-regions. Although aggregate compliance does not seem to improve by policy metrics, our distributional analysis shows that large gains obtain among taxpayers appearing non-compliant in the year before their sector’s reform. We also provide a dynamic perspective on bunching at salient, audit-relevant revenue thresholds generated by the system. Relative revenue reshuffling from above and below these thresholds provide evidence that bunching in our context may emerge from both desirable and adversarial updating in compliance behavior.

Paper
Una proposta per un APE volontario finalmente a regimeUna proposta per un APE volontario finalmente a regimeIstituto Bruno Leoni, Briefing Papers

with F. Del Prato

Media coverage: Il Foglio

Abstract

In this paper we advocate for Ape (an early retirement option available to Italian employees) to become "structural". We claim that it responds to the need for greater flexibility in retirement, while maintaining the sustainability of the pension system over the long-run. Moreover, we discuss some proposals that would make it easier for potential beneficiaries to claim AdE, reducing the low take-up problem observed in the first months after its implementation. 

Paper

Curriculum Vitae

I am an Assistant Professor at the Einaudi Institute for Economics and Finance (EIEF) in Rome.
I was previously a Postdoctoral Fellow at the National Bureau of Economic Research (NBER).
I received my Ph.D. in Economics from Harvard University in 2019 and my Master of Science in Economic and Social Sciences from Bocconi University.

Teaching

Other

Newspaper Articles