Understanding Unemployment Across California Counties

Abstract

Unemployment rates differ widely and persistently across counties. This article examines equilibrium forces related to this geographic disparity with a focus on California. We show that although seasonal variation in employment can account for some of the differences, it cannot explain the total variation. Factors such as educational attainment, age, and gender appear to be strongly related to unemployment differences. Individuals living in higher‐unemployment areas also have a lower propensity to migrate. Because migration is usually considered to be the main equilibrating force, this evidence helps further explain why unemployment rates across counties are persistently different.