Noncompete Agreements, Training, and Wage Competition

28 Pages Posted: 5 Jan 2022

See all articles by Oz Shy

Oz Shy

Federal Reserve Banks - Federal Reserve Bank of Atlanta

Rune Stenbacka

Hanken School of Economics

Date Written: January 4, 2022

Abstract

We study the effects of noncompete contracts in an environment where firms invest in training junior workers. After obtaining employer-provided training, trained workers can choose whether to remain loyal to their initial employer or switch to the competing employer. We evaluate the effects of noncompete agreements on wages, employment, investment in training, production, profits, and total welfare.

Keywords: Noncompete agreements, wage competition, on-the-job training, labor law

JEL Classification: J41, J31, K31, L4, M53

Suggested Citation

Shy, Oz and Stenbacka, Rune, Noncompete Agreements, Training, and Wage Competition (January 4, 2022). Available at SSRN: https://ssrn.com/abstract=4000688 or http://dx.doi.org/10.2139/ssrn.4000688

Oz Shy (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Atlanta ( email )

1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States

HOME PAGE: http://www.frbatlanta.org/research/economists/shy-oz.aspx?panel=1

Rune Stenbacka

Hanken School of Economics ( email )

P.O. Box 479
Arkadiankatu 22
Helsinki, Helsinki 00101
Finland

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