AEA Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
The Impact of Noncompetes on Wages and Job Tenure: New Evidence from NLSY Data
AEA Papers and Proceedings
(pp. 273–277)
Abstract
Noncompete agreements (NCAs) are pervasive even in low-wage labor markets, yet most evidence relies on variation in enforceability rather than NCA incidence. Using longitudinal data from the NLSY97, we study how signing an NCA affects wage trajectories and job tenure. Exploiting complete work histories and applying a "clean controls" local projections difference-in-differences design, we find a striking divergence: NCAs are associated with significantly slower wage growth for low-education workers over four years but faster wage growth for high-education workers. Effects on job tenure are imprecisely estimated for both groups.Citation
Potter, Tristan, André Kurmann, and Bart Hobijn. 2026. "The Impact of Noncompetes on Wages and Job Tenure: New Evidence from NLSY Data." AEA Papers and Proceedings 116: 273–277. DOI: 10.1257/pandp.20261078Additional Materials
JEL Classification
- J22 Time Allocation and Labor Supply
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 Wage Level and Structure; Wage Differentials
- J41 Labor Contracts
- J62 Job, Occupational, and Intergenerational Mobility; Promotion