Behavioral factors and determinants of formalization: an informative experiment on the Simplified Regime for Small Businesses (RESIMPLE) in Paraguay.

Last registered on March 24, 2026

Pre-Trial

Trial Information

General Information

Title
Behavioral factors and determinants of formalization: an informative experiment on the Simplified Regime for Small Businesses (RESIMPLE) in Paraguay.
RCT ID
AEARCTR-0017463
Initial registration date
December 13, 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
December 26, 2025, 2:21 AM EST

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

Last updated
March 24, 2026, 9:07 AM EDT

Last updated is the most recent time when changes to the trial's registration were published.

Locations

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Primary Investigator

Affiliation
Instituto Desarrollo

Other Primary Investigator(s)

PI Affiliation
Instituto Desarrollo
PI Affiliation
Instituto Desarrollo

Additional Trial Information

Status
In development
Start date
2025-05-12
End date
2026-12-15
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
The Paraguayan economy has a high level of labor and business informality, which is one of the main challenges for the country's productive and fiscal development. According to recent estimates by the Permanent Household Survey (EPH), approximately 65% of workers work in the informal sector, without access to social security or compliance with tax obligations. This situation limits collection, reduces labor protection, and makes it difficult to consolidate an equitable tax system.

In response to this challenge, the Paraguayan State, through the Dirección Nacional de Ingresos Tributarios (DNIT), implemented the Simplified Regime for Small Businesses (RESIMPLE), in order to facilitate the incorporation of microentrepreneurs into the formal system through simplified procedures and reduced payments. However, the adoption of the regime remains limited, suggesting that the barriers to formalization are not only economic or administrative, but also behavioral and perceptual.

This study seeks to provide experimental evidence on the behavioral factors that influence the decision to formalize, within the framework of the IDB's call "Understanding the Informal Economy and Associated Behaviors in Economic Agents". Through the application of behavioral economics tools, the project will evaluate how different framing—administrative, economic, and social—affect the willingness of informal workers to register with RESIMPLE.

This evidence will allow us to understand the cognitive and social determinants of informality, and will contribute to the design of evidence-based communication strategies and public policies that strengthen fiscal and productive inclusion. Likewise, the study represents an opportunity to articulate efforts between the DNIT and the Development Institute, integrating applied research and public policy for the benefit of the country's economic development.
External Link(s)

Registration Citation

Citation
Cappello Irrázabal, Claudio, Marcos Martinez Sugastti and José Molinas Vega. 2026. "Behavioral factors and determinants of formalization: an informative experiment on the Simplified Regime for Small Businesses (RESIMPLE) in Paraguay. ." AEA RCT Registry. March 24. https://doi.org/10.1257/rct.17463-2.0
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2025-12-13
Intervention End Date
2026-09-30

Primary Outcomes

Primary Outcomes (end points)
1. Willingness / Intention to Formalize
This primary variable measures the participant's self-reported probability of registering for the RESIMPLE regime following the informational intervention. It serves as the main indicator of the immediate effect of each informational component and will be assessed through survey questions, specifically using a Likert scale to gauge the likelihood of registering in the upcoming months or a binary response regarding the specific intention to initiate the administrative process. Given the nested structure of the experiment, this outcome will be used to identify the marginal effect of each arm: the effect of administrative information (T1 vs. C0), the additional effect of economic framing (T2 vs. T1), and the marginal contribution of prosocial framing (T3 vs. T2).
2. Behavioral Formalization Outcome
This outcome represents the "gold standard" of the study by measuring the concrete action of formalization rather than just the intent. It is defined as a binary variable (1=Yes, 0=No) indicating whether the participant successfully initiated or completed their RESIMPLE registration within a specified follow-up period (e.g., 30 to 60 days post-intervention). The same adjacent-arm comparisons applied to the primary outcome will be used here to assess whether informational effects on intent translate into actual behavior. In the context of this pilot, this measure also serves to test the feasibility of tracking administrative data.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Type of study: The present study is a randomized control group experiment (RCT) with random assignment at the individual level, designed to identify the causal effect of different information frames on the willingness of informal workers in the construction sector to formalize within the RESIMPLE regime.

Target population: The population of interest is made up of informal workers in the construction and maintenance sector (masons, carpenters, electricians, painters, installers, among others) who are not registered with the DNIT or affiliated with the IPS. The study will be implemented mainly in Asunción and cities in the Central department, with the possibility of extending it to rural communities to analyze territorial differences.

Experimental design and treatment groups
Participants will be randomly assigned to one of four experimental groups following an additive structure:

Control Group – C0 (Informational Placebo): Will receive a neutral video on occupational safety on construction sites, unrelated to taxation, registration, or formalization decisions. This group controls for attention, engagement, and exposure to video content, allowing for the isolation of the causal effects of treatment-relevant information.
Treatment 1 – T1 (Administrative Information): Will receive an informative video with basic explanations about the RESIMPLE regime, its eligibility criteria, the registration procedure, and the amounts to be paid.
Treatment 2 – T2 (Economic Benefits): Will receive all content from T1, plus additional information on the private economic benefits of formalization, such as the ability to issue invoices, access formal clients, credit, stability, and protection from sanctions.
Treatment 3 – T3 (Social Benefits or Social Norms): Will receive all content from T2, plus a prosocial framing that emphasizes the collective benefits of formalization, the contribution to the common welfare, fairness, and the importance of following the social norm of "doing things right" as part of a progressing community.

This nested design allows for the identification of the marginal effect of each informational component through adjacent-arm comparisons: the effect of administrative information is identified by comparing T1 to C0, the additional effect of economic information by comparing T2 to T1, and the marginal contribution of the prosocial framing by comparing T3 to T2.
Each participant will watch only one of the four videos, individually, without knowing the existence of other groups or versions.
Procedure

The interviewer will introduce himself and inform the general objectives of the study.
The eligibility criteria will be verified: not to be registered in DNIT or affiliated with the IPS, to work in the construction sector and to be between 18 and 65 years old.
The participant's consent to participate will be confirmed directly within the survey.
The interviewer will make the random assignment and play the video corresponding to the assigned group.
Then, the participant will complete a structured survey on socioeconomic aspects and perception of formalization.
Finally, you can choose between two options:

Receive a transfer of PYG 20,000, or
Receive personalized assistance to formalize, including the first three months of contribution covered by the project, the printing and sending of a RESIMPLE receipt book and accompaniment to take care of it yourself after the first three months (this package is equivalent to PYG 200,000).
Experimental Design Details
Not available
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
780 people
Sample size: planned number of observations
780 people
Sample size (or number of clusters) by treatment arms
164 people control; 226 people treatment 1; 226 people treatment 2; 164 people treatment
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
0.125
Supporting Documents and Materials

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IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number