The Effect of Franchise No-poaching Restrictions on Worker Earnings

50 Pages Posted: 25 Jul 2022 Last revised: 26 Jul 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

Multiple version iconThere are 2 versions of this paper

Date Written: July 20, 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 through early 2020. Implementing a staggered difference-in-differences research design using Burning Glass Technologies job vacancies and Glassdoor salary reports, we document the nationwide effect of the enforcement campaign on pay at franchising chains across numerous industries. Our preferred specification estimates a 6.6% increase in posted annual earnings from the job vacancy data and an approximate 4% increase in worker-reported earnings. (JEL: J42, K21, L40, J31)

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

JEL Classification: J42, K21, L40, J31

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 (July 20, 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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