RT Journal Article
SR Electronic
T1 The Impacts of Restricting Mobility of Skilled Service Workers: Evidence from Physicians
JF Journal of Human Resources
JO J Hum Resour
FD University of Wisconsin Press
SP 0617-8840R5
DO 10.3368/jhr.55.3.0617-8840R5
A1 Kurt Lavetti
A1 Carol Simon
A1 William D. White
YR 2019
UL http://jhr.uwpress.org/content/early/2019/02/04/jhr.55.3.0617-8840R5.abstract
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.