TY - JOUR T1 - Why are Low-Wage Workers Signing Noncompete Agreements? JF - Journal of Human Resources JO - J Hum Resour DO - 10.3368/jhr.57.3.0619-10274R2 SP - 0619-10274R2 AU - Matthew S. Johnson AU - Michael Lipsitz Y1 - 2020/05/12 UR - http://jhr.uwpress.org/content/early/2020/05/04/jhr.57.3.0619-10274R2.abstract N2 - Policymakers are concerned by evidence that noncompete agreements (NCAs) are widely used in low-wage jobs. We show that firms that would otherwise not use NCAs are induced to use one in the presence of frictions to adjusting wages downward. Using a new survey of salon owners, we find that declines in the terms of trade for employees and increases in the minimum wage lead to higher NCA use, but only at firms for which the employee’s cost of an NCA likely exceeds the employer’s benefit. Furthermore, minimum wage increases have a negative effect on employment only where NCAs are unenforceable. ER -