These Caps Spilleth Over: Equilibrium Effects of Unemployment Insurance by Cynthia Doniger

Join us for this week's Macroeconomics Research Seminar, Summer Term 2026.

Cynthia Doniger, from the Federal Reserve, will present this week's Macroeconomics seminar on These Caps Spilleth Over: Equilibrium Effects of Unemployment Insurance.

Abstract

U.S. unemployment insurance policy, which features benefits assigned as a percentage of past wages up to a dollar-valued cap, engenders tests for spillovers from policy variation to workers who are not directly treated. These tests reveal a pattern—positive spillovers in one case and negative in another—that is reconciled by a model including information frictions coupled with ex ante wage commitments. Our results provide novel evidence of the presence of this market structure and are quantitatively and policy relevant. Indeed, magnitudes imply that increasing the replacement rate while holding the cap constant would decrease aggregate unemployment of insured individuals.

This seminar will be held on campus in 5B.307 at 1.30pm on Wednesday, 22 April 2026. This event is open to all levels of study and is also open to the public. To register your place, please contact the seminar organisers.

This event is part of the Macroeconomics Research Seminar Series.