In the first scenario, the effective burden of employer contributions is assumed to fall exclusively on the employer. In the second scenario, the burden falls exclusively on the employee, the underlying assumption being that in the long run employers adjust wages in response to the level of employer contributions (see Brittain, 1971, Vroman, 1974, and Beach and Balfour, 1983). See Figure 2.3 in OECD (2007). Quarterly Journal of Economics, Vol.