Experience rating and the generosity of unemployment insurance: Effects on county and metropolitan unemployment rates

It is found that state policies affect county and metropolitan employment rates, particularly their policies with respect to unemployment compensation. A generous compensation system is associated with higher unemployment rates, and greater experience rating is associated with lower rates. It is also found that greater unionization is associated with higher unemployment rates. Secular manufacturing growth has a weak negative association with unemployment rates in nonmetropolitan counties, but no association in metropolitan areas.