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- W2755510119 abstract "Covenants not to compete are often included in employment agreements between firms and employees, justified by each party’s voluntary “freedom to contract.” However, noncompetes may also generate externalities for all individuals in the market, including those who have not signed such agreements. We theorize that enforceable noncompetes increase frictions in the labor market by increasing uncertainty and recruitment costs, and by curtailing entrepreneurship. We find that in state-industry combinations with a higher incidence and enforceability of noncompetes, workers – including those unconstrained by noncompetes – receive relatively fewer job offers, have reduced mobility, and experience lower wages. The results offer policymakers a reason to restrict noncompetes beyond axiomatic appeals to a worker’s “freedom of contract” and highlight labor market frictions that may impact firm-level human capital strategies." @default.
- W2755510119 created "2017-09-25" @default.
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- W2755510119 date "2017-01-01" @default.
- W2755510119 modified "2023-09-23" @default.
- W2755510119 title "Mobility Constraint Externalities: How Noncompetes Shackle the Unconstrained" @default.
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- W2755510119 doi "https://doi.org/10.2139/ssrn.3027715" @default.
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