Nudging the Self-employed into Contributing to Social Security: Evidence from a Nationwide Quasi Experiment in Brazil

Juan Villa, Danilo Fernandes and Mariano Bosch

No 7313, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: This paper studies the first large scale effort by the Brazilian government to increase the social security compliance of self-employed workers using behavioral interventions. In 2014, the Brazilian Ministry of Social Security gradually delivered by postal mail a booklet reminding nearly 3 million self-employed workers their obligation to contribute to social security. We find that, sending the booklet increased payments by 15 percent and compliance rates by 7 percentage points. This increase is concentrated around the month the booklet was delivered and disappears three months after the intervention, a pattern known as action and backsliding. The relatively brief increase in payments outweighs the cost of sending the booklet by at least a factor of 2. Our results suggest that active behavioral interventions could be used as policy instruments that are orders of magnitude more cost-effective than subsides to increase social security contributions in developing countries, particularly for the self-employed.

Keywords: Social Security; Employability (search for similar items in EconPapers)
JEL-codes: D03 H26 H55 O17 (search for similar items in EconPapers)
Date: 2015-11
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:idb:brikps:7313

DOI: 10.18235/0000214

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