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Noncompete agreements, training, and wage competition

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  • Oz Shy
  • Rune Stenbacka

Abstract

We study the effects of noncompete agreements 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. Firms earn higher profits and pay lower average wage when they require workers to sign noncompete agreements.

Suggested Citation

  • Oz Shy & Rune Stenbacka, 2023. "Noncompete agreements, training, and wage competition," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 32(2), pages 328-347, April.
    • Handle: RePEc:bla:jemstr:v:32:y:2023:i:2:p:328-347
    DOI: 10.1111/jems.12510
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    References listed on IDEAS

    as
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