Question A:
Prohibiting firms from imposing employment contract provisions that prevent workers from moving to a competitor or starting a competing business would lead to a substantial increase in wages in the affected industries.
Responses
Responses weighted by each expert's confidence
Question B:
A ban on non-compete clauses would lead to a measurable increase in innovation.
Responses
Responses weighted by each expert's confidence
Question C:
A ban on non-compete clauses would lead to a measurable reduction in firms’ investment in staff training.
Responses
Responses weighted by each expert's confidence
Question A Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
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 Daron Acemoglu |
MIT | Bio/Vote History | ||
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Non-compete clauses excessively empower firms and are not justified by the arguments their proponents offer. Nevertheless, there is no convincing evidence yet that they have a big impact on wages.
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 Joseph Altonji |
Yale | Bio/Vote History | ||
 Alan Auerbach |
Berkeley | Bio/Vote History | ||
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 David Autor |
MIT | Bio/Vote History | ||
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Noncompetes are abused by U.S. employers and pertain in sectors where trade secrets cannot possibly be relevant (e.g., sandwich makers at fast food restaurants). But we have no evidentiary basis for saying how large a wage or mobility impact this will have in the U.S.
-see background information here |
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 Katherine Baicker |
University of Chicago | Did Not Answer | Bio/Vote History | |
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 Abhijit Banerjee |
MIT | Did Not Answer | Bio/Vote History | |
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 Marianne Bertrand |
Chicago | Bio/Vote History | ||
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 Markus Brunnermeier |
Princeton | Did Not Answer | Bio/Vote History | |
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 Raj Chetty |
Harvard | Did Not Answer | Bio/Vote History | |
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 Judith Chevalier |
Yale | Bio/Vote History | ||
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Empirical evidence that I am aware of is linked but I think overall magnitudes very hard to predict.
-see background information here |
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 David Cutler |
Harvard | Bio/Vote History | ||
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 Angus Deaton |
Princeton | Bio/Vote History | ||
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 Darrell Duffie |
Stanford | Bio/Vote History | ||
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Seems somewhat likely, but I don't have much conviction here, because this could radically change supply and demand in the related employment market in ways that I have difficulty predicting.
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 Aaron Edlin |
Berkeley | Bio/Vote History | ||
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The FTC has put together some evidence on this point.
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 Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Substantial?
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 Liran Einav |
Stanford | Bio/Vote History | ||
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 Ray Fair |
Yale | Bio/Vote History | ||
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 Amy Finkelstein |
MIT | Did Not Answer | Bio/Vote History | |
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 Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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Non-competes are typically valid for one year. It is unlikely that a one-year restriction would have substantial effects.
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 Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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more evidence is necessary to get to "substantial"
-see background information here |
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 Robert Hall |
Stanford | Bio/Vote History | ||
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 Oliver Hart |
Harvard | Bio/Vote History | ||
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Ex post, more competition for labor will increase the wage. But initial wages may be be lower because firms don't have to offer so much given that workers can move later.
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 Bengt Holmström |
MIT | Bio/Vote History | ||
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 Caroline Hoxby |
Stanford | Bio/Vote History | ||
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 Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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The key word is substantial. I think it will increase wages not not sure if substantial.
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 Kenneth Judd |
Stanford | Bio/Vote History | ||
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 Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Unlikely to be a large effect.
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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The sign is right, but magnitude is unclear to me. Given that California already does not enforce them seems like there should a literature on this, hope other panelists can point to the best papers on this.
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 Pete Klenow |
Stanford | Bio/Vote History | ||
 Jonathan Levin |
Stanford | Bio/Vote History | ||
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 Eric Maskin |
Harvard | Bio/Vote History | ||
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The direct effect should be an increase in wages because of the increase in competition. However, conceivably, there could be a general equilibrium effect that makes the entire industry less profitable---and thereby lowers workers' marginal products
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 William Nordhaus |
Yale | Bio/Vote History | ||
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 Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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 Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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 Larry Samuelson |
Yale | Bio/Vote History | ||
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There are conflicting effects: banning non-competes would enhance the bargaining power of employees, but if firms invest less in employee training, may make employees less valuable.
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 José Scheinkman |
Columbia University | Bio/Vote History | ||
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Not sure about substantial
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 Richard Schmalensee |
MIT | Bio/Vote History | ||
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I think "substantial" is probably too strong.
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 Carl Shapiro |
Berkeley | Bio/Vote History | ||
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 Robert Shimer |
University of Chicago | Bio/Vote History | ||
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In the short run, this would put upward pressure on wages of workers currently in non-compete agreements. In the long run, it would restructure employment relationships, lower productivity, and hence adversely affect earnings.
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 James Stock |
Harvard | Did Not Answer | Bio/Vote History | |
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 Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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 Christopher Udry |
Northwestern | Bio/Vote History | ||
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Question B Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
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Daron Acemoglu |
MIT | Bio/Vote History | ||
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Same as the previous question. The evidence is not there yet.
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Joseph Altonji |
Yale | Bio/Vote History | ||
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Noncompetes help firms protect intellectual property, but they reduce the ability of new competitors to assemble a workforce.
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Alan Auerbach |
Berkeley | Bio/Vote History | ||
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David Autor |
MIT | Bio/Vote History | ||
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No info on this.
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Katherine Baicker |
University of Chicago | Did Not Answer | Bio/Vote History | |
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Abhijit Banerjee |
MIT | Did Not Answer | Bio/Vote History | |
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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Markus Brunnermeier |
Princeton | Did Not Answer | Bio/Vote History | |
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Raj Chetty |
Harvard | Did Not Answer | Bio/Vote History | |
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Judith Chevalier |
Yale | Bio/Vote History | ||
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David Cutler |
Harvard | Bio/Vote History | ||
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Angus Deaton |
Princeton | Bio/Vote History | ||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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Again, I don't have conviction. For example, maybe I am wrong because a ban could make hiring the affected experts become uneconomic.
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Aaron Edlin |
Berkeley | Bio/Vote History | ||
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California provides some limited evidence.
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Liran Einav |
Stanford | Bio/Vote History | ||
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Ray Fair |
Yale | Bio/Vote History | ||
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Amy Finkelstein |
MIT | Did Not Answer | Bio/Vote History | |
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Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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See previous answer
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Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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Robert Hall |
Stanford | Bio/Vote History | ||
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Protection of IP may be important for innovation
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Oliver Hart |
Harvard | Bio/Vote History | ||
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Ideas will move more easily but firms will have less incentive to innovate given that their intellectual property rights are less secure.
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Bengt Holmström |
MIT | Bio/Vote History | ||
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Caroline Hoxby |
Stanford | Bio/Vote History | ||
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Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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I don’t know of research on this.
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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Non-compete clauses may protect employers' intellectual property but my guess is that they are overly broad and firms' deep pockets deter legal action against inefficient restrictions on employee movement. The net effect of limiting no-complete clauses would be positive.
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Pete Klenow |
Stanford | Bio/Vote History | ||
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Jonathan Levin |
Stanford | Bio/Vote History | ||
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Eric Maskin |
Harvard | Bio/Vote History | ||
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An increase in innovation is one possibility, since ideas would be spread more widely. But a decrease is also possible, since inventors would have a harder time getting a return on their investment
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William Nordhaus |
Yale | Bio/Vote History | ||
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I think positive would be more accurate, but it would help.
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Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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Larry Samuelson |
Yale | Bio/Vote History | ||
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Unsure about the magnitude, but removing a constraint should enhance innovation.
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José Scheinkman |
Columbia University | Bio/Vote History | ||
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See Carlino 2021 (Federal Reserve Bank of Philadelphia)
-see background information here |
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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Carl Shapiro |
Berkeley | Bio/Vote History | ||
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Robert Shimer |
University of Chicago | Bio/Vote History | ||
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James Stock |
Harvard | Did Not Answer | Bio/Vote History | |
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Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Christopher Udry |
Northwestern | Bio/Vote History | ||
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The effects on discouraging training and on increasing cross firm flows of info offset, probably limiting net changes.
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Question C Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
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Daron Acemoglu |
MIT | Bio/Vote History | ||
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There is no evidence that firms are investing in training because of non-competes.
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Joseph Altonji |
Yale | Bio/Vote History | ||
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Alan Auerbach |
Berkeley | Bio/Vote History | ||
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David Autor |
MIT | Bio/Vote History | ||
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Just don't have enough evidence to make any quantitative statement, even a qualitative quantitative statement(such as "a measurable reduction").
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Katherine Baicker |
University of Chicago | Did Not Answer | Bio/Vote History | |
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Abhijit Banerjee |
MIT | Did Not Answer | Bio/Vote History | |
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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Markus Brunnermeier |
Princeton | Did Not Answer | Bio/Vote History | |
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Raj Chetty |
Harvard | Did Not Answer | Bio/Vote History | |
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Judith Chevalier |
Yale | Bio/Vote History | ||
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Tricky and depends on treatment of contractual workarounds (repayment of specific training expenses, etc); incentives to self-financed training of course higher.
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David Cutler |
Harvard | Bio/Vote History | ||
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Angus Deaton |
Princeton | Bio/Vote History | ||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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Aaron Edlin |
Berkeley | Bio/Vote History | ||
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Theory suggests some effect.
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Liran Einav |
Stanford | Bio/Vote History | ||
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Ray Fair |
Yale | Bio/Vote History | ||
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Amy Finkelstein |
MIT | Did Not Answer | Bio/Vote History | |
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Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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See previous answer
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Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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Robert Hall |
Stanford | Bio/Vote History | ||
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Oliver Hart |
Harvard | Bio/Vote History | ||
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With respect to training in general skills, yes. With respect to training in specific skills, less clear.
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Bengt Holmström |
MIT | Bio/Vote History | ||
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Caroline Hoxby |
Stanford | Bio/Vote History | ||
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Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Depends on the industry.
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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I doubt the people being forced to sign are getting explicit training.
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Pete Klenow |
Stanford | Bio/Vote History | ||
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Jonathan Levin |
Stanford | Bio/Vote History | ||
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Eric Maskin |
Harvard | Bio/Vote History | ||
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A firm is less likely to invest in an employee's human capital if that employee can turn around and work for the employee's competitor
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William Nordhaus |
Yale | Bio/Vote History | ||
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Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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Larry Samuelson |
Yale | Bio/Vote History | ||
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One expects firms to be leery of employees taking the gains from training elsewhere.
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José Scheinkman |
Columbia University | Bio/Vote History | ||
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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Carl Shapiro |
Berkeley | Bio/Vote History | ||
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Robert Shimer |
University of Chicago | Bio/Vote History | ||
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James Stock |
Harvard | Did Not Answer | Bio/Vote History | |
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Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Christopher Udry |
Northwestern | Bio/Vote History | ||
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