Clause and Effect: A Field Experiment on Noncompete Clauses, Knowledge Flows, Job Mobility, and Wages | Research Seminar with Evan Starr

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Abstract: Evan Starr and co-authors, Bo Cowgill and Brandon Freiberg, study the effects of employer noncompete clauses in a two-firm field experiment about hiring and job performance, as well as post-separation mobility, secret-sharing, and income. They find that receiving a job offer with a noncompete is associated with earnings losses six months later, even when noncompetes are salient in the hiring process. This effect occurs because workers are more likely to reject offers containing noncompetes, and because those who sign them are less likely to take future jobs while under the noncompete. They find no evidence that noncompetes reduce secret sharing compared to NDAs.

Evan Starr is an Assistant Professor of Management & Organization at the Robert H. Smith School of Business at the University of Maryland. He received a Ph.D. in economics from the University of Michigan and a bachelor's degree from Denison University. He originally hails from Claremont, California. Starr's current research examines issues at the intersection of human capital accumulation, employee mobility, entrepreneurship, and innovation. In a recent set of projects utilizing employee-employer matched data and survey data that he and coauthors developed, Starr examined the use and impacts of noncompete agreements and their enforceability on the provision of firm-sponsored training, employee mobility and earnings, and on the creation, growth, and survival of new ventures.