Non-compete agreements and labor allocation across product markets

Mueller, Clemens

Document Type: Working paper
Year of publication: 2023
Place of publication: Mannheim
Publication language: English
Institution: Business School > ABWL u. Corporate Governance (Niessen-Ruenzi 2012-)
Subject: 330 Economics
Abstract: I analyze the effect of non-compete agreements (NCAs) on career trajectories of inventors in the US. NCAs constrain the within-industry employment choice set of inventors. I show causal effects that 1.5 in 100 inventors annually bypass their NCAs by moving to new employers in more distant product markets. Reallocated inventors are subsequently less productive. Inventors move to new employers who are less reliant on NCAs and there is a lower quality match between inventors and their new employers. Firms affected by labor outflows grow less whereas firms with labor inflows grow more. I highlight regulatory frictions which lead to unintended detrimental reallocation of human capital in the economy.
Additional information: Last revised: 17 Mar 2023

Dieser Eintrag ist Teil der Universitätsbibliographie.

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