The Effect of Franchise No-poaching Restrictions on Worker Earnings

38 Pages Posted: 25 Jul 2022 Last revised: 6 Apr 2023

See all articles by Brian Callaci

Brian Callaci

Open Markets Institute

Matthew Gibson

Williams College; IZA Institute of Labor Economics

Sergio Pinto

University of Maryland; Instituto Universitário de Lisboa (ISCTE-IUL), DINÂMIA'CET

Marshall Steinbaum

University of Utah Department of Economics

Matthew Walsh

Burning Glass Technologies

Date Written: February 10, 2023

Abstract

We evaluate the impact of the Washington State Attorney General's enforcement campaign against employee no-poaching clauses in franchising contracts, which unfolded from 2018 until early 2020. We employ a staggered Difference-in-Differences research design and microdata from Burning Glass Technologies job vacancies and salary reports from Glassdoor to document the effect of the enforcement campaign on pay at franchising chains. Our preferred specification estimates a 3.6% increase in chain-specific annual pay according to the job vacancy data and a 1.3% increase in chain-specific reported salaries.

Keywords: franchising, monopsony, no-poach, horizontal anti-competitive practices

JEL Classification: J01, J41, J42, K21, L2, L41

Suggested Citation

Callaci, Brian and Gibson, Matthew and Pinto, Sergio and Steinbaum, Marshall and Walsh, Matthew, The Effect of Franchise No-poaching Restrictions on Worker Earnings (February 10, 2023). Available at SSRN: https://ssrn.com/abstract=4155577 or http://dx.doi.org/10.2139/ssrn.4155577

Brian Callaci

Open Markets Institute ( email )

1440 G Street NW
Washington, DC 20005
United States

Matthew Gibson

Williams College ( email )

Fernald House
Williamstown, MA 01267
United States

HOME PAGE: http://matthewgibson.org

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org/en/people/affiliates/10269/matthew-gibson

Sergio Pinto

University of Maryland ( email )

College Park
College Park, MD 20742
United States

Instituto Universitário de Lisboa (ISCTE-IUL), DINÂMIA'CET ( email )

Portugal

Marshall Steinbaum (Contact Author)

University of Utah Department of Economics ( email )

1645 Central Campus Dr.
Salt Lake City, UT 84112
United States

HOME PAGE: http://https://faculty.utah.edu/u6024209-Marshall_Steinbaum/hm/index.hml

Matthew Walsh

Burning Glass Technologies

One Lewis Wharf
Boston, MA 02110
United States

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