PT  - JOURNAL ARTICLE
AU  - Balasubramanian, Natarajan
AU  - Chang, Jin Woo
AU  - Sakakibara, Mariko
AU  - Sivadasan, Jagadeesh
AU  - Starr, Evan
TI  - Locked In? The Enforceability of Covenants Not to Compete and the Careers of High-Tech Workers
AID  - 10.3368/jhr.monopsony.1218-9931R1
DP  - 2022 Apr 01
TA  - Journal of Human Resources
PG  - S349--S396
VI  - 57
IP  - S
4099  - http://jhr.uwpress.org/content/57/S/S349.short
4100  - http://jhr.uwpress.org/content/57/S/S349.full
SO  - J Hum Resour2022 Apr 01; 57
AB  - 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 employer–employee data. We find that eight years after starting a job in an average-enforceability 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.