Non-compete Agreements in a Rigid Labour Market: The Case of Italy

Tito Boeri, Andrea Garnero and Lorenzo Giovanni Luisetto ()
Additional contact information
Lorenzo Giovanni Luisetto: University of Michigan

No 16021, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Non-compete clauses (NCCs) limiting the mobility of workers have been found to be rather widespread in the US, a flexible labour market with large turnover rates and a limited coverage of collective bargaining. This paper explores the presence of such arrangements in a rigid labour market, with strict employment protection regulations by OECD standards and where all employees are, at least on paper, subject to collective bargaining. Based on a representative survey of employees in the private sector, an exam of collective agreements and case law, we find that in Italy i) collective agreements play no role in regulating the use of NCCs while the law specifies only the formal requirements, ii) about 16% of private sector employees are currently bound by a NCC, iii) NCCs are relatively frequent among low educated employees in manual and elementary low paid occupations having no access to any type of confidential information, and iv) in addition to NCCs, a number of other arrangements limit the post-employment activity of workers. Many of the NCCs do not comply with the minimum requirements established by law and yet workers do not consider them as unenforceable and appear to behave as they were effective. Even when NCCs are unenforceable they appear to negatively affect wages when they are introduced without changing the tasks of the workers involved. Normative implications are discussed in the last section of the paper.

Keywords: labour market concentration; monopsony; non-compete clauses (search for similar items in EconPapers)
JEL-codes: J31 J41 J42 L40 (search for similar items in EconPapers)
Date: 2023-03
New Economics Papers: this item is included in nep-com, nep-hrm, nep-law, nep-lma and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published - published online in: Journal of Law, Economics, and Organization , 24 April 2024

Downloads: (external link)
https://docs.iza.org/dp16021.pdf (application/pdf)

Related works:
Working Paper: Non-compete agreements in a rigid labour market: the case of Italy (2023)
Working Paper: Non-compete agreements in a rigid labour market: the case of Italy (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp16021

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().