Authors: Justin Bloesch and Jacob P. Weber
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Staff Reports
Congestion in Onboarding Workers and Sticky R&D
Number 1075
November 2023
November 2023
JEL classification: E22, O36
R&D investment spending exhibits a delayed and hump-shaped response to shocks. We show in a simple partial equilibrium model that rapidly adjusting R&D investment is costly if the probability of converting new hires into productive R&D workers (“onboarding”) is decreasing in the number of new hires (“congestion”). Congestion thus causes R&D-producing firms to slowly hire new workers in response to good shocks and hoard workers in response to bad shocks, providing a microfoundation for convex adjustment costs in R&D investment. Using novel, high-frequency productivity data on individual software developers collected from GitHub, a popular online collaboration platform, we provide quantitative evidence for such congestion. Calibrated to this evidence, a sticky-wage new Keynesian model with heterogeneous investment-producing firms subject to congestion in onboarding and no other frictions yields hump-shaped responses of R&D investment to shocks.
Author Disclosure Statement(s)
Justin Bloesch
The author declares that he has no relevant or material financial interests that relate to the research described in this paper.
Jacob P. Weber
The author declares that he has no relevant or material financial interests that relate to the research described in this paper.
The author declares that he has no relevant or material financial interests that relate to the research described in this paper.
Jacob P. Weber
The author declares that he has no relevant or material financial interests that relate to the research described in this paper.
Suggested Citation:
Bloesch, Justin, and Jacob P. Weber. 2023. “Congestion in Onboarding Workers and Sticky R&D.” Federal Reserve Bank of New York Staff Reports, no. 1075, February. https://doi.org/10.59576/sr.1075
Bloesch, Justin, and Jacob P. Weber. 2023. “Congestion in Onboarding Workers and Sticky R&D.” Federal Reserve Bank of New York Staff Reports, no. 1075, February. https://doi.org/10.59576/sr.1075
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