Optimal Regulation of Noncompete Contracts

• 成果类型: Article
• 署名作者: Shi, Liyan
• 署名单位: Carnegie Mellon University; Center for Economic & Policy Research (CEPR)
• 刊物名称: ECONOMETRICA
• ISSN/ISSBN: 0012-9682
• DOI: 10.3982/ECTA18128
• 发表日期: 2023
• 页码: 425-463
• 关键词: the-job search; labor mobility; INVESTMENT; compete; COMMITMENT; INNOVATION; covenants; GROWTH; wages

摘要

I study regulation of noncompete employment contracts, assessing the trade-off between restricting worker mobility and encouraging firm investment. I develop an on-the-job search model in which firms and workers sign dynamic wage contracts with noncompete clauses and firms invest in their workers' general human capital. Employers use noncompete clauses to enforce buyout payments when their workers depart, ultimately extracting rent from future employers. This rent extraction is socially excessive, and restrictions on these clauses can improve efficiency. The optimal regulation policy is characterized. In an application to the managerial labor market using a novel contract data set, I find the optimal policy to be quantitatively close to a ban.