Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/180554 
Year of Publication: 
2018
Series/Report no.: 
IZA Discussion Papers No. 11536
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We show how experience and dynamic learning processes reduce the obstacles to optimization imposed by information frictions when individuals newly enter the formal sector economy. Most importantly, we provide causal evidence on the exact mechanisms through which individuals learn about the functioning of government programs. To this aim, we exploit novel and rich administrative data on the universe of taxpayers in Ecuador and the introduction of generous tax deduction policies. Key to the identification of information transmission is exogenous worker mobility between firms. We find that the spread of information is driven by mobility of managers and tax experts.
Subjects: 
learning
tax avoidance
information frictions
taxation and development
bunching
behavioral responses to taxation
JEL: 
D83
H24
H26
H32
O17
Document Type: 
Working Paper

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