Publications

Tax enforcement and firm performance: real and reporting responses to risk-based tax audits

(with Jarkko Harju, Kaisa Kotakorpi and Tuomas Matikka)
International Tax and Public Finance (2025)

Work in progress

Making Employers: The Effects of Supporting First Hires in a Large-Scale Randomized Experiment

(with Elias Einiö)
Available at SSRN (January 12, 2026)
A Policy Report in Finnish available here

Abstract
Most entrepreneurs operate without employees. Hiring may be unprofitable for them, but they may also be reluctant to pay the one-time costs of becoming an employer due to attentional costs, risk aversion, or credit constraints. We examine the extent to which a temporary subsidy to hire first employees induces entrepreneurs to become employers in a large-scale randomized experiment. The experiment offered to 34,500 randomly selected non-employer entrepreneurs e 10,000 to cover 50% of the wage costs of first employees. We find a 20% increase in the fraction of firms that hire workers, with effects of similar magnitude on wage costs and number of employees. The effects stay positive at 7% after the subsidy period, indicating that the temporary subsidy created new permanent employers. Our results suggest that frictions in hiring first employees can be an important barrier for employer entry and firm growth.

Improving VAT Compliance by Switching Who Remits the Tax: Evidence from Construction Firms

(with Juho Junttila and Aliisa Koivisto)
VATT Working Paper 170 (2024)

Abstract
Many countries use a reverse charge mechanism (RC) in value added tax (VAT) to combat tax evasion in specific high-risk sectors. The RC shifts the liability to remit VAT from the seller to the buyer. We study the adoption of RC in the construction sector in Finland in 2011 using tax return data on the universe of Finnish firms. Using a difference-in-differences design, we find that reported net VAT liabilities in the construction sector increased by 5\%. According to our results, changing the remittance policy decreased VAT evasion by small subcontractors that provide services for large firms.

(No) Effects of subsidizing the first employee – Evidence of a Low Take-up Puzzle Among Firms in Finland

VATT Working Paper 166, and FIT Working Paper 23 (2024)

Abstract
Finland had a large regional wage subsidy for hiring the first employee in 2007–2011. In this paper, I show that the take-up of the subsidy was very low: only 2% firms that became employers used the subsidy. The subsidy was restricted to hiring a full-time employee, which reduced the take-up. However, even among full-time employers the take-up rate was only 6%. Hence, a large majority of firms left thousands of euros on the table by not using the subsidy. Based on the descriptive evidence, the low take-up seems to be explained by low awareness in addition to costs of using the subsidy. Using a regional difference-in-differences identification strategy, I estimate the effect of the subsidy on the probability of becoming an employer and other firm outcomes. As a consequence of the low take-up, the estimated effect is zero.

Does Accelerated Depreciation Boost Investment? Evidence from a Regional Policy

(with Elias Einiö)

Dissertation

Essays on Firm Responses to Tax Policy, 2021, University of Turku, Turku School of Economics

Policy Reports

Rekrytointitukikokeilun loppuarviointi, 2025, Työ- ja elinkeinoministeriön julkaisuja 2025:28, with Elias Einiö

Geographical and Occupational Mismatch in Finland over the Recent Era of Economic Crises: Estimates Using an Interconnected-Markets Approach, 2024, The Finnish Economic Policy Council, Memorandum 1/2024, with Veikko Uusitalo, Merja Kauhanen and Tuomo Suhonen

Yritysverotukien käsite, luokittelu ja vaikuttavuus, 2023, VATT Tutkimukset 193, with Elias Einiö, Seppo Kari and Kristiina Äimä

Yksinyrittäjien rekrytointituen vaikutusten arviointi: Suunnitelma satunnaistetusta kontrolloidusta kokeesta (Impact evaluation of recruitment subsidy for sole entrepreneurs: A plan for a randomised controlled trial), 2021, Työ- ja elinkeinoministeriön julkaisuja 2021:1, with Elias Einiö & Oskari Nokso-Koivisto

Effects of subsidizing the first employee – Empirical evidence from Finland, Background report for the Report 2016 of the Economic Policy Council, Jan 2017