Noncompete covenants or covenant not to compete (CNC) are clauses in employment contracts in which the employee agrees not to gain employment with a competitor firm. In this article, we study the efficiency aspects of such contracts by incorporating the effect of labor mobility restrictions on knowledge transfer across firms, investment decisions by firms, and investment by workers. Following research that shows state-wise variations in the degree of CNC enforcement, we allow the strength of CNC enforcement to vary as a matter of regulatory policy and derive the optimal strength of enforcement. We also look at how regulations around CNCs should be optimally designed when employers can use collusive agreements, such as "no poaching" agreements, as an alternative to noncompete clauses. Given recent allegations of employer collusion among large Silicon Valley firms, we argue for a cautious approach in designing policies on CNC enforcement. (JEL J24, J41, J63, K31)
Among the many disruptions caused by the COVID-19 Pandemic was the sudden move to online teaching in colleges and universities across the globe. In this paper, we provide a brief overview of existing literature on the effectiveness of online college programs relative to traditional in-person programs. We argue that pre-pandemic studies may have drawn overly pessimistic conclusions about online teaching in higher education. We highlight two important limitations of pre-pandemic studies, namely endogeneity bias and the use of older instructional technology. The data that will emerge from the forced shift to online instruction during the pandemic will help correct several of these biases and provide a more accurate picture of the hopes and challenges of online higher education. Finally, we also provide some preliminary evidence on virtual instruction and evaluation methods using a survey of online undergraduate and graduate classes. We find that large undergraduate classes benefitted greatly from the online format, while smaller graduate classes faced significant challenges. Empirical studies of post-pandemic data will help in identifying when and how online instruction can provide the effective instruction to students to address both the short-term goals of course and degree completion and long-term outcomes in the labor market.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.