The dispersion of US state unemployment rates: The role of market and non-market equilibrium factors

European nations, particularly the UK, have been observed to have persistent dispersion in regional unemployment rates. The dispersion is often hypothesized to be caused by centralized collective bargaining and government policies that limit regional labour market adjustments. Although the US labour market is considered more flexible, possessing higher rates of labour mobility and less government mandates, there also is persistent dispersion in US state unemployment rates. This paper investigates the factors that underlie the persistent dispersion in US state unemployment rates. The factors examined include amenities, crime, education, home ownership and residency patterns, industry composition and international migration.