Non-Compete Agreements: A Review of the Literature

24 Pages Posted: 27 Jan 2020

See all articles by John M. McAdams

John M. McAdams

Federal Trade Commission, Bureau of Economics

Date Written: December 31, 2019

Abstract

Non-compete agreements (NCAs) are employment contracts that limit the post-employment options of workers. On the one hand, they potentially solve an investment hold-up problem, allowing firms to make mutually beneficial investments in workers. On the other hand, the agreements potentially erode workers’ future bargaining position by limiting their outside options. In this paper, we review the economic literature on non-compete agreements in the U.S.

Keywords: Non-compete agreements, worker mobility, training, investment holdup

JEL Classification: J2, J6, K3, L4, M5

Suggested Citation

McAdams, John M., Non-Compete Agreements: A Review of the Literature (December 31, 2019). Available at SSRN: https://ssrn.com/abstract=3513639 or http://dx.doi.org/10.2139/ssrn.3513639

John M. McAdams (Contact Author)

Federal Trade Commission, Bureau of Economics ( email )

600 Pennsylvania Ave., NW
Washington, DC 20580
United States

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