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

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: We examine how the enforceability of covenants not to compete (CNCs) affects employee mobility and wages of high-tech workers. We expect CNC enforceability to lengthen job spells and constrain mobility, but its impact on wages is ambiguous. Using a matched employer-employee dataset covering the universe of jobs in thirty U.S states, we find that higher CNC enforceability is associated with longer job spells (fewer jobs over time), and a greater chance of leaving the state for technology workers. Consistent with a “lock-in” effect of CNCs, we find persistent wage-suppressing effects that last throughout a worker’s job and employment history.

Pages: 70 pages
Date: 2017-01
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (6)

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https://www2.census.gov/ces/wp/2017/CES-WP-17-09.pdf First version, 2017 (application/pdf)

Related works:
Journal Article: Locked In? The Enforceability of Covenants Not to Compete and the Careers of High-Tech Workers (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:17-09

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