Publications
Congestion in Onboarding Workers and Sticky R&D
with Jacob Weber (2025)
Forthcoming, AEJ Macro
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 monetary policy shocks.
Working Papers
Firm Wage Setting, On-the-Job Search, and the Inflationary Effects of Supply Shocks
with Seung Joo Lee and Jacob Weber (2026)
Resubmitted, AEJ Macro
We argue that if firms set wages and workers search on-the-job, then pass-through from prices to wages is weak, limiting the cumulative inflationary effects of supply shocks. We derive a tractable general equilibrium model with firm wage setting and on-the-job search, yielding an empirically-realistic wage Phillips curve tying worker quits to wage growth. In our model, price level increases reduce real wages at both workers’ current job and their outside options, muting firms’ incentive to raise wages. Quantitative exercises reveal that counterfactually assuming union wage-setting can overstate wage and price inflation following oil shocks.
Monopsony with Recruiting
with Birthe Larsen and Anders Yding (2026)
We develop a model of wage posting and on-the-job search where firms use wages and recruiting expenditures to attract workers. We capture three sources of labor market monopsony power: preference heterogeneity, search frictions, and labor market concentration. The model allows firms’ labor supply curves to be perfectly elastic in the long run but inelastic in the short run, consistent with evidence that firms pay higher wages while growing even though the wage premium at large firms is small. We provide empirical evidence that labor supply curves are perfectly elastic in the long run using the effect of export demand shocks on the wage growth of job switchers in Denmark. Our results imply that monopsony rents are dissipated by recruiting costs, which can reconcile existing estimates of monopsony power with the profit share of national income in rich countries.
(Past Version: "When do Firms Profit From Wage Setting Power?")
Which Workers Earn More at Productive Firms? Position Specific Skills and Individual Worker Hold-up Power
with Birthe Larsen and Bledi Taska (2022)
We argue that productive firms share rents with workers only in occupations where workers have individual hold-up power. Workers have this power if the output of positions is individually complementary and workers acquire position-specific skills on the job. We estimate individual worker hold-up power by occupation using the effect of worker deaths on firm profits in Denmark and a measure of task differentiation from US job postings. High hold-up occupations exhibit higher wage levels and higher long-run passthrough of permanent firm productivity innovations to wages. We examine inequality implications for the gender wage gap and the effect of superstar firms.
Structural Changes in Investment and the Waning Power of Monetary Policy
with Jacob Weber (2026)
We argue that secular change in both the production and composition of investment goods has weakened private investment's role in the transmission of monetary policy to labor earnings and consumption. We show analytically that fluctuations in the production of investment goods amplify the response of consumption to monetary policy shocks by varying labor income for hand-to-mouth agents. We document three secular changes that weaken this channel: (i) labor's share of value added in investment goods production has declined, (ii) the import share of investment goods has risen, and (iii) the composition of investment has shifted towards components that are less responsive to monetary policy. A small open economy, two agent New Keynesian model calibrated to match these facts implies a 38% and 26% weaker response of labor income and aggregate consumption, respectively, to real interest rate shocks in a 2010's economy relative to a 1960's economy.
Federal Reserve Publications
The Effect of Winter Weather on US Economic Activity
with Francois Gourio, Economic Perspectives, 2015, 39:1-20.