The Chains That Bind? Restrictive Covenants and Labor Market Entrants' Perceived Occupational Mobility

ABSTRACT Using a conjoint experiment on highly educated labor market entrants in the Philippines, we examine how restrictive covenants shape perceived occupational mobility. Respondents compared hypothetical jobseeker profiles with randomized non‐compete, training repayment, and non‐solicitation clauses, then chose the likely applicant to four mobility pathways: vertical or lateral jobs within or across industries. Findings show that non‐compete clauses deter within‐industry and encourage across‐industry perceived mobility. Training repayment and non‐solicitation clauses exert targeted effects depending on scope conditions. Finally, these patterns hold across contractual breadth and firms' monitoring stringency, and are attenuated by positive beliefs about loyalty norms and perceived sufficiency of legal recourse.