Monthly state-level full-employment unemployment rates for 2001–2025 reveal persistent regional differences. Using national rather than state benchmarks changes whether a state is classified as slack, near full employment, or tight in 15.5 percent of state-months.
The paper argues that when some states are tight while others remain slack, a policy rule that also reacts to cross-state dispersion in unemployment gaps can deliver better inflation and slack outcomes than a rule based only on the national mean. The takeaway is a policy design point: heterogeneity is a potentially useful state variable for stabilization, not just a distributional detail.
Using state-level variation, this project studies how unemployment insurance, occupational licensing, minimum wages, and other institutions shape structural unemployment across the United States.