Non-Competes: A Case of Missing Wages in Australia

Omer Majeed, Sarah Davies, Nabeeh Zakariyya, Amee McMillan and Yun Jia

CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University

Abstract: Non-compete clauses have become a focal point in debates over fairness and efficiency in modern labour markets. There is growing academic and policy interest in non-competes, yet evidence on wage effects remains largely US-focused. Using new Australian survey data linked to administrative records, we find no systematic evidence of wage compensation for the mobility restrictions associated with non-competes. We test robustness across multiple samples and methodologies. Furthermore, our novel results show that there is substantial heterogeneity: high-productivity firms show a positive association with wages, while low-productivity firms use non-competes widely without clear justification. Smaller firms also appear to adopt non-competes without much justification. We document substantial heterogeneity in non-compete coverage and examine how it varies with firm size, industry, workforce skill composition, and occupational diversity. Our broader findings raise concerns over both efficiency and equity and underscore the case for policy scrutiny.

Keywords: non-competes; employment law; bargaining power; wages; mobility; incomplete markets (search for similar items in EconPapers)
JEL-codes: J3 J4 J6 K12 L41 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2026-08
New Economics Papers: this item is included in nep-bec
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Persistent link: https://EconPapers.repec.org/RePEc:een:camaaa:2026-65

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