Abstract We study rare special cases of existing employers opting into Social Security. We use restricted teacher-level data from Texas to analyze how public school districts that opt into Social Security handle the increased tax burden. Using event study and synthetic control methods, we find suggestive evidence that districts gradually reduce salary growth over time and reach a long-run salary difference that matches or exceeds the Social Security tax. We do not find evidence of changes in teacher employment. These results reveal potential implications of the Social Security opt-in for currently uncovered public sector workers, as well as local and state governments.
Kim et al. (Tue,) studied this question.