Locked In? The Enforceability of Covenants Not to Compete and the Careers of High-Tech Workers

Natarajan Balasubramanian, Jin Woo Chang, Mariko Sakakibara, Jagadeesh Sivadasan and Evan Starr

Journal of Human Resources, 2022, vol. 57, issue S, s349-s396

Abstract: We study the relationship between the enforceability of covenants not to compete (CNCs) and employee mobility and wages. We exploit a 2015 CNC ban for technology workers in Hawaii and find that this ban increased mobility by 11 percent and new-hire wages by 4 percent. We supplement the Hawaii evaluation with a cross-state analysis using matched employer–employee data. We find that eight years after starting a job in an average-enforceability state, technology workers have about 8 percent fewer jobs and 4.6 percent lower cumulative earnings relative to equivalent workers starting in a nonenforcing state. These results are consistent with CNC enforceability increasing monopsony power.

JEL-codes: J3 K12 L6 (search for similar items in EconPapers)
Date: 2022
Note: DOI: 10.3368/jhr.monopsony.1218-9931R1
References: Add references at CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
http://jhr.uwpress.org/cgi/reprint/57/S/S349
A subscription is required to access pdf files. Pay per article is available.

Related works:
Working Paper: Locked In? The Enforceability of Covenants Not to Compete and the Careers of High-Tech Workers (2017)
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:uwp:jhriss:v:57:y:2022:i:s:p:s349-s396

Access Statistics for this article

More articles in Journal of Human Resources from University of Wisconsin Press
Bibliographic data for series maintained by ().