PT  - JOURNAL ARTICLE
AU  - Lavetti, Kurt
AU  - Simon, Carol
AU  - White, William D.
TI  - The Impacts of Restricting Mobility of Skilled Service Workers: Evidence from Physicians
AID  - 10.3368/jhr.55.3.0617-8840R5
DP  - 2019 Feb 07
TA  - Journal of Human Resources
PG  - 0617-8840R5
4099  - http://jhr.uwpress.org/content/early/2019/02/04/jhr.55.3.0617-8840R5.short
4100  - http://jhr.uwpress.org/content/early/2019/02/04/jhr.55.3.0617-8840R5.full
AB  - Why do skilled services firms use non-compete agreements (NCAs), which prohibit workers from leaving firms and competing against them? We conduct a survey of physicians linking NCA use to labor-market outcomes and firm performance, and show that by deterring poaching of patients NCAs increase the return to job-tenure, with larger effects in states with more enforceable NCA laws. These effects are consistent with NCAs enabling practices to allocate clients to new physicians through intra-firm referrals, reducing a form of investment holdup. We discuss an array of supporting suggestive evidence, but also find NCAs provide some benefits by reducing job turnover.