Low Local Unemployment Attracts Job Seekers from Neighboring States

Across the country, local economies range from rural to urban, tech-centric to industrial, and everything in between. From state to state, labor markets offer diverse options to workers of all kinds. Recently released unemployment data from the Bureau of Labor Statistics reveal the variation in unemployment rates nationwide, providing a look at what those markets look like in each state.

The data show the national unemployment rate standing at 6.1%, but differing significantly between states. In June, according to the BLS, “22 states and the District of Columbia had over-the-month unemployment rate decreases, 14 states had increases, and 14 states had no change.” With a low of 2.7% in North Dakota and a high of 7.9% in Rhode Island, this variation in unemployment rates suggests the economic recovery looks different in each state.

These BLS data are interesting to consider along with recent findings from the Indeed Hiring Lab, which reveal that job seekers are responsive to local economic environments. In particular, we found that states with higher unemployment rates have a smaller share of job seekers searching for jobs in that state from outside.

While unemployment rates are correlated with the share of job seekers from outside a state, the key variable is available job postings — states with more job postings have more job seekers overall, and these job seekers are coming from many other states. One additional job posting is associated with 1.4 additional searchers from outside a state, and 7.1 additional searchers overall (both inside and outside a state).

Considering the variation in state unemployment rates in conjunction with labor mobility indicates that even though job seekers are responsive to local economic conditions, they aren’t so responsive that recovery is the same everywhere. The image below shows where people are searching for jobs in the present, providing a view of what that response looks like today.

Job Search Across the US

This visualization emphasizes the regional focus of job search — when job seekers search across borders, they often look in neighboring states. In some cases, this means they may be able to commute across state lines. In other cases, they may be driving distance from their home state.

The exceptions to this pattern are primarily Texas and California, which are attracting job seekers from across the country. These states have the highest number of job postings, and overall, even controlling for population, job seekers are more likely to search in states with more job postings.

To learn more about interstate labor mobility in the US, download the latest report from the Indeed Hiring Lab, Where People Search for Jobs: Cross-Border Labor Mobility.

Download the free report