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


Our online store


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

Review of Economic Studies, Vol. 90, Issue 4, pp. 1800–1831, July 2023

May 31, 2022

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

Product Collections

Our online store

Working Papers

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

The paper has previously circulated in a different version that can be found 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

One Cohort at a Time: A New Perspective on the Declining Gender Pay Gap [Preliminary version available upon request. Complete paper coming soon!]


Using data from Italy and the US, this paper provides new insights on the decline of the gender pay gap over the last few decades. We find support for a cohort-driven interpretation for the shrinking of the gender gap, according to which more recent worker cohorts (defined by their year of entry in the labor market) with smaller gender gaps have gradually replaced older cohorts with larger gender gaps. We show that the cross-cohort decline in the entry-wage gender gap among younger workers accounts for the total reduction in the overall gender gap at most until 2000, after which the labor-market exit of older cohorts becomes the prominent explanation. Next, we zoom on younger workers and ask whether the reduction in the entry-wage gender gap is driven by improvements in younger women's outcomes. Instead, we find that most of the reduction in the entry-wage gender gap is accounted for by large earning losses among younger men (relative to both older workers and younger women). Finally, we show that, in Italy, cross-cohort changes in the initial matching between workers and firms help explain a substantial portion of the decline in the overall gender gap, but this is not true of initial sector allocations.

Using Prediction Models to Design Tax Audit Policies: Incentives vs Targeting


We study how to design tax audit policies when the Tax Authority can use an inference model that predicts the true taxpayers income. We propose a decomposition of tax revenues into an “ex-ante incentives” component that depends on declared income and an “ex-post targeting” component that captures the performance of tax auditing relative to random audit. In a simple case where taxpayers are heterogeneous in income but not in their propensity to evade we show that the Authority can achieve arbitrarily good collection if the model is precise enough and taxpayers are aware of the use of model. However, the revenues from ex-post targeting of audits are negligible at the optimum: the information from the model is used to shape ex-ante incentives, while ex-post collection is close to a random audit system. Introducing heterogeneity in evasion behavior, which makes the inference problem more complicated, does not change this conclusion. This is because optimal reliance on the model compresses the declarations of taxpayers earning the same income, making the potential revenues from targeting small. We present some numerical simulations that study how the tax collection potential responds to improvements in the precision of the model to start quantifying the gains and the decreasing marginal returns of investing in better prediction models.

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


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.

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


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. 


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.



Newspaper Articles