Papers written by Author(s): 'Evan Starr'
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enforcement - 2
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Working PaperLocked In? The Enforceability of Covenants Not to Compete and the Careers of High-Tech Workers
January 2017
Working Paper Number:
CES-17-09
We examine how the enforceability of covenants not to compete (CNCs) affects employee mobility and wages of high-tech workers. We expect CNC enforceability to lengthen job spells and constrain mobility, but its impact on wages is ambiguous. Using a matched employer-employee dataset covering the universe of jobs in thirty U.S states, we find that higher CNC enforceability is associated with longer job spells (fewer jobs over time), and a greater chance of leaving the state for technology workers. Consistent with a 'lock-in' effect of CNCs, we find persistent wage-suppressing effects that last throughout a worker's job and employment history.View Full Paper PDF
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Working PaperENFORCING COVENANTS NOT TO COMPETE: THE LIFE-CYCLE IMPACT ON NEW FIRMS
June 2014
Working Paper Number:
CES-14-27
We examine the impact of enforcing non-compete covenants (CNC) on the formation and performance of new firms using matched employer-employee data on 30 US states. To identify the impact of CNC, we exploit the inter-state variation in CNC enforcement along with the fact that courts do not enforce such covenants between law firms and departing lawyers in any state. Using a difference-in-difference-in-difference specification with law firms and firms that are not withinindustry spinouts as the baseline, we find states with stricter CNC enforcement have fewer, but larger within-industry spinouts that are more likely to survive their nascent years, and conditional on survival, grow faster during those years. These results are consistent with CNC enforcement having a selection effect on within-industry spinouts. Particularly, with stricter enforcement, only founders with higher-quality ideas and resources choose to overcome CNC-related barriers, which reduces entry rate but increases observed short-term performance of these spinouts.View Full Paper PDF
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