Revisiting the Impact of the Brazilian SIMPLES Program on Firms' Formalization Rates
A recent survey of rigorous impact evaluations of programs to help small and medium-size firms to formalize indicates that the programs do not seem to work for most informal firms. One of the few exceptions finds large effects of a tax simplificati...
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| Language: | English en_US |
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World Bank, Washington, DC
2016
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| Online Access: | http://documents.worldbank.org/curated/en/2016/03/26078745/revisiting-impact-brazilian-simples-program-firms-formalization-rates http://hdl.handle.net/10986/24147 |
| Summary: | A recent survey of rigorous impact
evaluations of programs to help small and medium-size firms
to formalize indicates that the programs do not seem to work
for most informal firms. One of the few exceptions finds
large effects of a tax simplification program in Brazil
called SIMPLES on firms' formalization rates and
performance indicators. Using the same data set but a
different identification strategy, another study concludes
that the program had limited effect on formalization rates.
The aim of this paper is twofold. First, it revisits the two
studies to reconcile their conflicting conclusions. Second,
it investigates the validity of the identification strategy
of both studies. The findings suggest that the conflicting
results between the two studies are caused by the dates each
used to identify when the program was put into effect. A
robustness check indicates that data heaping and seasonality
around November cast doubts on the identification strategy
used in both studies to estimate the effect of this
particular program. |
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