How many states have above-average unemployment rates?

Quick: in April 2012, how many US states have an employment rate at or above the national average? (Hint: the US has 51 states or state-equivalents. I’m counting DC.)

Here’s the data by state; the national rate is 8.1 percent. That gives seventeen states. Only one-third of the states have rates above average.

This actually isn’t that surprising, once you look at the data — states with large population have larger unemployment rates. (I’m not an economist; why should this be?) In the plot below we have unemployment on the y-axis and log (base 10) of population on the x-axis. The dotted line represents the average unemployment rate of 8.1 percent; you can see that most states are above it. The upward slope indicates that low-population states have lower unemployment rates than high-population states. The solid line is the least-squares regression line for predicting unemployment from log population.

R code for generating the plot, from the file “unemployment.csv” (data is in the first comment to this post; of course you should edit the first line to wherever you store the file):

``` unemployment = read.csv('c:/users/michael/desktop/blog/unemployment.csv') x = log(unemployment\$pop)/log(10)+3; y = unemployment\$unemp; plot(x, y, xlab="log_10 population", ylab="unemployment", main="Population of state vs. unemployment rate, April 2012") text(x, y, labels=unemployment\$state, cex=0.5, adj=c(0,-1)) abline(8.1, 0, lty=2) abline(lm(y~x)) ```

The equation of the line is $y = 1.66x - 3.62$. To interpret the slope, we say that if we multiply a state’s population by 10 then we expect to add 1.66 percent to the unemployment rate. It’s probably easier to think in terms of doublings; we expect a state with twice the population to have an unemployment rate $(1.66) \log_10 2$ percent, or 0.50 percent, larger.

So does half the population live in states with a higher-than-average unemployment rate? Pretty much.

``` sum(unemployment\$pop[y>=8.1]) ```

gives the sum of the populations in those 17 states; it returns 159398, for 159.398 million. (My population data are in thousands.) Total population at that time was 308.746 million; so 51.6% of the population lived in a state with unemployment at or above average. (If you throw out Washington state, which had unemployment equal to the national average of 8.1 percent, you get 49.4%.)

Perhaps somewhat ironically given the content of this post, I’m looking for a job, in the SF Bay Area. See my linkedin profile.

4 thoughts on “How many states have above-average unemployment rates?”

1. The file “unemployment.csv” is as follows:

“state”,”unemp”,”pop”
“CA”,10.9,37254
“TX”,6.9,25146
“NY”,8.5,19378
“FL”,8.7,18801
“IL”,8.7,12831
“PA”,7.4,12702
“OH”,7.4,11537
“MI”,8.3,9884
“GA”,8.9,9688
“NC”,9.4,9535
“NJ”,9.1,8792
“VA”,5.6,8001
“WA”,8.1,6725
“MA”,6.3,6548
“IN”,7.9,6484
“AZ”,8.2,6392
“TN”,7.8,6346
“MO”,7.3,5989
“MD”,6.7,5774
“WI”,6.7,5687
“MN”,5.6,5304
“CO”,7.9,5029
“AL”,7.2,4780
“SC”,8.8,4625
“LA”,7.1,4533
“KY”,8.3,4339
“OR”,8.5,3831
“OK”,5,3751
“CT”,7.7,3574
“IA”,5.1,3046
“MS”,8.7,2967
“AR”,7.2,2916
“KS”,6.1,2853
“UT”,6,2764
“NV”,11.7,2701
“NM”,6.9,2059
“WV”,6.7,1853
“NE”,3.9,1826
“ID”,7.7,1568
“HI”,6.3,1360
“ME”,7.2,1328
“NH”,5,1316
“RI”,11.2,1053
“MT”,6.1,989
“DE”,6.8,898
“SD”,4.3,814
“AK”,6.9,710
“ND”,3,673
“VT”,4.6,626
“DC”,9.5,602
“WY”,5.3,564

2. “This actually isn’t that surprising, once you look at the data — states with large population have larger unemployment rates. (I’m not an economist; why should this be?)”

I’m not an economist either, but maybe this could be a situation where cause and effect are not what we assume. Rather than higher population causing higher employment, maybe it’s the other way around: states which structurally have more to offer workers tend to attract more workers, and the workers who are there can afford to have more kids…

3. For the correlation, between unemployment and population, i think the cause is population growth. People want to move to the higher population states, which tends to increase their employable population. http://petemurphy.wordpress.com/2009/03/12/state-by-state-unemployment-reveals-relationship-to-population-density/

I couldn’t find it, but another blog talked about the opposite effect, that people want to move out of north dakota, say. This means a smaller employable population (people with jobs don’t have as much reason to move, or are already more stable.