Optimal Regulation of Noncompete Contracts

I study regulation of noncompete employment contracts, assessing the trade?off between restricting worker mobility and encouraging firm investment. develop an on?the?job search model in which firms workers sign dynamic wage contracts with clauses invest their workers' general human capital. Employers use to enforce buyout payments when depart, ultimately extracting rent from future employers. This extraction is socially excessive, restrictions on these can improve efficiency. The optimal policy characterized. In application managerial labor market using a novel contract data set, find be quantitatively close ban.