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
Google Scholar Profile: Matteo Paradisi

My papers

Research

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Publications

Career Spillovers in Internal Labor Markets
We document the existence of career spillovers among employees in firms with limited promotion opportunities.

Accepted, Review of Economic Studies

May 31, 2022

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

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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
Audit Rule Disclosure and Tax Compliance
We show that tax authorities can stimulate tax compliance by strategically releasing audit-relevant information.
June 1, 2021
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

Statistical Learning in Optimal Audit Design

Abstract

We study the benefits of using predictive models in tax collection. First, we show that in a given class of firms determined by observable characteristics when the marginal cost of evasion is constant so that there is only one level of evasion that is optimal for a given income, information is irrelevant if firms do not anticipate its use and audit capabilities are limited. Hence, the value of the audit system lies in the incentives it provides rather than in its direct collection. Also, in this framework globally optimal audit rules take a simple threshold form. Second, the irrelevance result breaks when conditional on income firms are heterogeneous in their declared profit. In this case the optimal audit targeting involves a more complex inference problem where information provided by a statistical model can be useful. We derive optimal audit rules within a non-linear class of functions. Finally, we estimate the model on the universe of Italian firm tax data linked to information on audits conducted by all tax authorities. We then use it to quantify the increase in revenue potential that is generated by moving from a simple linear prediction model to a more sophisticated learning algorithm.

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

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