Even as the unemployment rate is back down to normal levels, the labor market is still not fully healed. Decreased labor force participation rates and those stuck in part-time jobs remain problems in the U.S. and across nearly all states. The Total Employment Gap combines these measures into one metric to gauge the health of the economy. Just 7 of the 50 states are at full employment in early 2015.

1. 1
State Labor Market Slack
and Job Polarization
Oregon Office of Economic Analysis

2. Alabama
Alaska
Arizona
State Total Employment Gap Employment Gap Comparison Job Polarization Comparison

3. Arkansas
California
Colorado
State Total Employment Gap Employment Gap Comparison Job Polarization Comparison

4. Connecticut
Delaware
Florida
State Total Employment Gap Employment Gap Comparison Job Polarization Comparison

5. Georgia
Hawaii
Idaho
State Total Employment Gap Employment Gap Comparison Job Polarization Comparison

6. Illinois
Indiana
Iowa
State Total Employment Gap Employment Gap Comparison Job Polarization Comparison

7. Kansas
Kentucky
Louisiana
State Total Employment Gap Employment Gap Comparison Job Polarization Comparison

8. Maine
Maryland
Mass.
State Total Employment Gap Employment Gap Comparison Job Polarization Comparison

9. Michigan
Minnesota
Mississippi
State Total Employment Gap Employment Gap Comparison Job Polarization Comparison

10. Missouri
Montana
Nebraska
State Total Employment Gap Employment Gap Comparison Job Polarization Comparison

11. Nevada
New
Hampshire
New
Jersey
State Total Employment Gap Employment Gap Comparison Job Polarization Comparison

12. New
Mexico
New
York
North
Carolina
State Total Employment Gap Employment Gap Comparison Job Polarization Comparison

13. North
Dakota
Ohio
Oklahoma
State Total Employment Gap Employment Gap Comparison Job Polarization Comparison

14. Oregon
Penn.
Rhode
Island
State Total Employment Gap Employment Gap Comparison Job Polarization Comparison

15. South
Carolina
South
Dakota
Tennessee
State Total Employment Gap Employment Gap Comparison Job Polarization Comparison

16. Texas
Utah
Vermont
State Total Employment Gap Employment Gap Comparison Job Polarization Comparison

17. Virginia
Washington
West
Virginia
State Total Employment Gap Employment Gap Comparison Job Polarization Comparison

18. 18
Wisconsin
Wyoming
State Total Employment Gap Employment Gap Comparison Job Polarization Comparison

19. 19
Oregon Office of Economic Analysis
Methodology
The state level Total Employment Gap measure is based on Andrew Levin’s work at the IMF and
Dartmouth. It combines the unemployment gap, the labor force participation gap and the
underemployment gap to gauge how far the labor market is from full employment. Available data
at the state level is not identical to the U.S. overall. While the specifics do differ between these
estimates and Dr. Levin’s, the broader trends and calculations are similar.
Unemployment Gap: Calculate the average difference in unemployment rates between
each individual state and the U.S. over the 1990 to 2006 time
period. Add this average difference to the Congressional Budget
Office’s estimate for NAIRU to obtain a state level NAIRU estimate.
The unemployment gap is the difference between the state’s
actual unemployment rate and this state level NAIRU.
Participation Gap: Create a state demographically-adjusted labor force participation
rate. Fix age cohort LFPR at 2000 rates and apply these fixed rates
over time to the changing demographic/population figures by
state. Since population figures are available annually, convert
annual data to monthly or quarterly using a frequency conversion
(e.g. Eviews.) The participation gap is the difference between the
actual LFPR and the demographically-adjusted series.
Underemployment: Calculate those working part-time for economic reasons as share
of the labor force. Average the 2005-07 values; this is an estimate
of PT for economic reasons at full employment. Calculate the
difference between actual PT for economic reasons as share of the
labor force and the 2005-07 average. Divide by 2 to estimate full-
time equivalent positions.

20. 20
Oregon Office of Economic Analysis
Contact
www.OregonEconomicAnalysis.com
@OR_EconAnalysis
joshua.lehner@oregon.gov
(503) 378-4052