Incentivizing Formalization: A Pilot Study on Information and Choice among Construction Workers

Last registered on November 19, 2025
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Pre-Trial

Trial Information

General Information

Title
Incentivizing Formalization: A Pilot Study on Information and Choice among Construction Workers
RCT ID
AEARCTR-0017249
Initial registration date
November 15, 2025

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
November 19, 2025, 2:07 PM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
Paraguay
Region
Central

Primary Investigator

Name
José Molinas Vega
Affiliation
Instituto Desarrollo
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Claudio Cappello Irrázabal
PI Affiliation
Instituto Desarrollo
Contact Investigator
PI Name
Marcos Martinez Sugastti
PI Affiliation
Instituto Desarrollo

Additional Trial Information

Status
Completed
Start date
2025-05-12
End date
2025-11-19
Keywords
Behavior, Labor
Additional Keywords
Informal employment, logistic, tax compliance
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
The Paraguayan economy faces a persistent challenge of high informality (approx. 65% of workers), limiting tax revenue and social protection. Despite the implementation of the Régimen Simplificado para Pequeñas Empresas (RESIMPLE) by the Dirección Nacional de Ingresos Tributarios (DNIT) for low-income individual entrepreneurs or low-income sole proprietorship, adoption remains low, suggesting the presence of behavioral barriers.

The present study is a pilot trial with the primary objective of testing the feasibility of the intervention, the field logistics, and the effectiveness of the measurement instruments.

Specifically, this pilot will assess the feasibility of applying different informational framings—administrative, economic, and social—derived from behavioral economics. The goal is to measure how these distinct messages affect the willingness of informal workers to register for RESIMPLE.

The results of this pilot phase do not seek to establish definitive causal inference, but rather to validate the instruments (surveys and intervention materials), optimize recruitment logistics, and refine the design for an eventual large-scale Randomized Controlled Trial (RCT), in collaboration with the DNIT and the Instituto Desarrollo.
External Link(s)

Registration Citation

Citation
Cappello Irrázabal, Claudio, Marcos Martinez Sugastti and José Molinas Vega. 2025. "Incentivizing Formalization: A Pilot Study on Information and Choice among Construction Workers." AEA RCT Registry. November 19. https://doi.org/10.1257/rct.17249-1.0
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Experimental Details

Interventions

Intervention(s)
Intervention (Hidden)
Intervention Start Date
2025-11-16
Intervention End Date
2025-11-17

Primary Outcomes

Primary Outcomes (end points)
1. Protocol and Intervention Feasibility To assess the trial's logistical viability. This includes measuring recruitment efficiency, the successful implementation of the interventions (informational framings), and survey completion and attrition rates. The objective is to validate the field protocol for a future study.

2. Validation of the 'Intention to Formalize' Instrument To validate the survey instrument measuring "intention to formalize." We will assess if the instrument is sensitive to the different interventions (informational framings) and captures variance in participants' willingness to register for RESIMPLE, testing its suitability for the main trial.

3. Calibration of Mediator Instruments To test and calibrate the survey modules measuring key psychological constructs. We will evaluate the reliability and consistency of the scales used to measure institutional trust, perceived complexity of the RESIMPLE regime, and self-efficacy for formalization.

4. Feasibility of Behavioral Tracking To test the feasibility of measuring the "actual formalization" behavioral outcome. We will assess the logistical viability of tracking whether participants initiate or complete registration, primarily by testing the process of matching data with DNIT administrative records.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
This study is a Pilot Randomized Controlled Trial (Pilot RCT) with individual-level randomization.

Pilot Purpose: The primary objective of this pilot phase is to test the feasibility of the field protocol, validate the recruitment logistics, and test the effectiveness of the treatment (videos) and measurement (survey) instruments before a potential scale-up.

Target Population: The population of interest is informal workers in the construction sector (e.g., masons, carpenters, electricians) located primarily in Luque, Paraguay. Eligibility criteria are: being aged 18-65, not registered with the tax authority (DNIT), and not affiliated with the social security system (IPS).

Experimental Design and Treatment Arms: Eligible participants will be randomly assigned to one of three arms. Each participant will watch only one intervention video:

● Control Group (T0): Receives a video with basic administrative information about the RESIMPLE regime (requirements, costs, registration process).

● Treatment 1 (T1 - Economic Framing): Receives the same administrative information (T0) supplemented with framing that highlights the direct economic benefits of formalization (e.g., access to credit, stability, new clients).

● Treatment 2 (T2 - Social Framing): Receives the T1 information (administrative + economic) plus a social norms framing that emphasizes collective benefits and contribution to the common good.

Procedure and Outcome Measurement: Recruitment is conducted in the field. After eligibility screening, randomization is executed (pre-loaded on tablets) and the participant watches the assigned video. Immediately following the intervention, the participant completes a structured survey measuring perceptions, self-efficacy, institutional trust, and intention to formalize.

Finally, to capture a behavioral outcome, participants are offered a choice between two incentives: a) A monetary payment (PYG 20,000). b) Personalized assistance to register for RESIMPLE (including coverage of the first contribution payments and invoices print), this is approximately PYG 200,000.

The choice of incentive (a vs. b) will serve as one of the main outcome variables for this pilot.
Experimental Design Details
Randomization Method
Computer-generated Block Randomization (on-device).
Randomization Unit
The unit of randomization is the individual. There is no cluster or group-level randomization.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
12 people
Sample size: planned number of observations
12 people
Sample size (or number of clusters) by treatment arms
4 people control; 4 people treatment 1; 4 people treatment 2
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials