Face-to-face vs. virtual assistance to entrepreneurs: Evidence from a field experiment in Brazil

We conduct a field experiment on formalization and subsequent tax compliance of informal entrepreneurs in Rio de Janeiro favelas. Providing in-person one-on-one training with the offer of one-on-one assistance with the formalization process increased information levels about the program, intention to formalize, formalization, and subsequent tax compliance. Providing essentially the same information and assistance via instant messaging produced similar effects on knowledge and intention to formalize, but no effects on formalization itself. •We conducted a field experiment with low-income microentrepreneurs from favelas in Rio de Janeiro.•Individuals were assigned to in-person assistance, assistance via instant messaging, or no assistance.•Both treatments had comparable positive effects on formalization-related knowledge and motivation.•In-person assistance was effective in increasing formalization and tax-compliance by small rate.•Assistance via instant messaging had no effects on formalization and tax-compliance.