We examine how labor mobility restrictions in the form of non-compete clauses in employment contracts affect employee behavior. Using the mutual fund industry as testing laboratory, we show that fund managers respond to higher job termination costs due to increased enforceability of non-compete...

This paper examines how labor mobility restrictions such as non-compete clauses in employment contracts affect the incentives and resulting behavior of employees. Using the investment industry as a testing laboratory, we find that mutual fund managers respond to heightened career concerns due to...