Noncompete Clauses, Job Mobility, and Job Quality: Evidence from a Low-Earning Noncompete Ban in Austria

70 Pages Posted: 26 Mar 2021 Last revised: 16 Mar 2024

See all articles by Samuel G. Young

Samuel G. Young

Massachusetts Institute of Technology (MIT) - Department of Economics; Arizona State University (ASU) - Arizona State University (ASU), Department of Economics, Students

Date Written: March 5, 2024

Abstract

I study the effect of noncompete agreements on low-earning workers using a noncompete ban in Austria. The ban increased treated workers’ annual job-to-job transition rate by 0.3 percentage points (a two percent increase). This effect was driven by within-industry job transitions. The reform also disproportionately increased transitions to higher-quality firms and transitions accompanied by earnings gains. However, I do not find that the ban increased treated workers' overall earnings growth rates. This evidence shows that noncompetes in Austria restricted low-earning workers’ job mobility but that this impact was not large enough to affect aggregate mobility or earnings trends.

Keywords: Noncompete agreements, job mobility, job quality, wage growth

JEL Classification: J3, J41, J62, J08

Suggested Citation

Young, Samuel G., Noncompete Clauses, Job Mobility, and Job Quality: Evidence from a Low-Earning Noncompete Ban in Austria (March 5, 2024). Available at SSRN: https://ssrn.com/abstract=3811459 or http://dx.doi.org/10.2139/ssrn.3811459

Samuel G. Young (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

50 Memorial Drive
E52-391
Cambridge, MA 02142
United States

Arizona State University (ASU) - Arizona State University (ASU), Department of Economics, Students ( email )

AZ
United States

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