The Effect of No-poaching Restrictions on Worker Earnings in Franchised Industries
31 Pages Posted: 25 Jul 2022
Date Written: July 6, 2022
We investigate the effect of the Washington State Attorney General’s enforcement campaign against employee no-poach clauses in franchising contracts, which unfolded from 2018 until early 2020. We employ a dataset linking chain-level franchising contract provisions with employer-identified job ads from Burning Glass Technologies (BGT). We use several staggered Difference-in-Difference methodologies to measure the effect of removing franchise no-poach clauses on earnings posted in job ads following settlements reached with the Attorney General. Our preferred specification estimates a 3.3% increase in chain-specific annual earnings following no-poach removal.
Keywords: franchising, monopsony, no-poach, horizontal anti-competitive practices
JEL Classification: J01, J41, J42, K21, L2, L41
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