The Impact of Non-Competes on Wages and Job Tenure: New Evidence from NLSY Data

Bart Hobijn, Andre Kurmann and Tristan Potter

No WP 2026-03, Working Paper Series from Federal Reserve Bank of Chicago

Abstract: 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 imprecisely estimated for both groups.

Keywords: Non-compete; low-wage labor markets; Local projections; Difference-in-difference (search for similar items in EconPapers)
JEL-codes: J31 J41 J62 K31 (search for similar items in EconPapers)
Pages: 8
Date: 2026-03-04
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DOI: 10.21033/wp-2026-03

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