Search Results
Working Paper
The Impact of Non-Competes on Wages and Job Tenure: New Evidence from NLSY Data
Non-compete agreements (NCAs) are pervasive even in low-wage labor markets, yet most evidence relies on variation in enforceability rather than NCA incidence. Using longitudinal data from the NLSY97, we study how signing an NCA affects wage trajectories and job tenure. Exploiting complete work histories and applying a clean-controls local projections difference-in-difference design, we find a striking divergence: NCAs are associated with significantly slower wage growth for low-education workers over four years, but faster wage growth for high-education workers. Effects on job tenure are ...
Working Paper
On the Inefficiency of Non-Competes in Low-Wage Labor Markets
We study the efficiency of non-compete agreements (NCAs) in an equilibrium model of labor turnover. The model is consistent with empirical studies showing that NCAs reduce turnover, average wages, and wage dispersion for low-wage workers. But the model also predicts that NCAs, by reducing turnover, raise recruitment and employment. We show that optimal NCA policy: (i) is characterized by a Hosios like condition that balances the benefits of higher employment against the costs of inefficient congestion and poaching; (ii) depends critically on the minimum wage, such that enforcing NCAs can be ...