@article{bbf27ffa155643b59b59beffd7bd6a54,
title = "Locked In? The Enforceability of Covenants Not to Compete and the Careers of High-Tech Workers",
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 employeremployee data. We find that eight years after starting a job in an averageenforceability 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.",
author = "Natarajan Balasubramanian and Chang, {Jin Woo} and Mariko Sakakibara and Jagadeesh Sivadasan and Evan Starr",
note = "Funding Information: financial support of the Harold Price Center for Entrepreneurial Studies at UCLA Anderson School of Management and the Academic Senate of the University of California, Los Angeles. U.S. Census Bureau Disclaimer: Research results in this paper are those of the authors, and do not necessarily represent the views of the U.S. Census Bureau. The results presented here have been screened to ensure that no confidential data are revealed. This paper uses both publicly available and confidential data. The publicly available data are available from the LED Extraction Tool (https://ledextract.ces.census.gov/static/data .html), and replication code materials are available in the Online Appendix of Replication Materials. The confidential data are housed at the U.S. Census Bureau and require an application and approval for access. The authors are willing to assist with replication efforts (Evan Starr, estarr@umd.edu). Funding Information: Natarajan Balasubramanian is a Professor of Management at the Whitman School of Management. Jin Woo Chang is a Senior Associate at Mercer. Mariko Sakakibara is the Sanford and Betty Sigoloff Professor of Strategy at the UCLA Anderson School of Management. Jagadeesh Sivadasan is the Buzz and Judy Newton Professor of Business Administration at the University of Michigan Ross School of Business. Evan Starr is an Associate Professor at the University of Maryland Robert H. Smith School of Business. The authors thank Clint Carter and others at CES for all their assistance. They also thank Matthew Notowidigdo, Henry Hyatt, Ashish Arora, and conference/seminar participants at the MEA, INFORMS, AOM, Ohio State University, INSEAD, and the CES. This research uses data from the Census Bureau{\textquoteright}s Longitudinal Employer Household Dynamics Program, which was partially supported by the National Science Foundation Grants SES-9978093, SES-0339191, and ITR-0427889; National Institute on Aging Grant AG018854; and grants from the Alfred P. Sloan Foundation. The authors gratefully acknowledge the Publisher Copyright: {\textcopyright} 2022 by the Board of Regents of the University of Wisconsin System. All Rights Reserved.",
year = "2022",
month = apr,
doi = "10.3368/jhr.monopsony.1218-9931R1",
language = "English (US)",
volume = "57",
pages = "S349--S396",
journal = "Journal of Human Resources",
issn = "0022-166X",
publisher = "University of Wisconsin Press",
number = "SpecialIssue 1",
}