What Share of Your State Works for the Federal Government?
Delaney O’Kray-Murphy, EBRC Research Economist
Federal jobs account for 1.4% of Arizona employment, ranking the state 21st nationally
Federal employment plays a stabilizing role in state and regional economies. Unlike much of the private sector, federal jobs tend to be relatively stable across the business cycle, providing consistent wages, benefits, and demand for local services even during economic downturns. In states where federal employment represents a larger share of the workforce, this stability can help moderate employment volatility and support regional economic resilience.
Federal employment data used in this article are drawn from the Office of Personnel Management’s (OPM) FedScope database, which compiles and verifies employment records for the federal civilian workforce. Total nonfarm employment by state comes from the Bureau of Labor Statistics’ Current Employment Statistics (CES) program, which surveys approximately 121,000 businesses and government agencies each month, representing about 631,000 individual worksites.
Federal employment as a share of total employment varies substantially across states and regions. The District of Columbia ranks highest, with federal jobs representing 18.5% of total employment, while Connecticut ranks lowest at 0.5%. Exhibit 1 illustrates these differences by grouping states in quantiles based on their federal employment share, alongside total and federal employment counts.
Several regional patterns emerge from the data. Federal employment shares are relatively low across much of the Northeast, while states surrounding Washington, D.C. exhibit notably higher concentrations. Notably, California, which ranks first in the number of federal employees, ranks 39th in terms of employment share. Taken together, comparing absolute federal employment counts with total employment offers a more informative picture of the relative economic footprint of federal employment.
Exhibit 1: Federal Employment Share by State with Federal and Total Employment Levels, March 2025, OPM Fedscope, CES, Percent
While Exhibit 1 highlights the geographic concentration of federal employment, Exhibit 2 ranks states by federal employment share, excluding the District of Columbia to allow for more meaningful state-to-state comparisons. Maryland ranks highest on this measure, with federal employment accounting for 5.3% of its 6,263,220 jobs, followed by Hawaii at 4.2%. Arizona ranks 22nd nationally, with federal jobs comprising 1.4% of total employment. Across all states, federal employment averages approximately 1.6% of total employment.
At the lower end of the distribution, Connecticut derives just 0.5% of its 3,675,069 jobs from federal employment, with Wisconsin close behind at 0.6%. These differences provide insight into the degree to which state labor markets rely on federal employment, as well as their relative exposure to policy-driven or cyclical changes in federal staffing and spending.
Exhibit 2: Federal Employment Share Rankings by State, March 2025, OPM Fedscope, CES, Percent
How do these rankings relate to state size? Exhibit 3 plots state population against the share of employment attributable to the federal government, helping place federal employment concentrations in the context of overall labor market scale. The distribution shows a heavy clustering of states in the lower-left portion of the chart, reflecting states with both smaller populations and relatively low federal employment shares.
Two distinct groups of outliers emerge. Large population states such as California, Texas, and Florida maintain relatively low federal employment shares, around 1.0-1.5%, despite employing large quantities of federal workers in absolute terms. In contrast, smaller-population states such as Maryland, Virginia, Hawaii, and Alaska have disproportionately high federal employment shares. These states are either adjacent to Washington, D.C., or geographically remote, suggesting the influence of federal administrative centers, military installations, and federally managed land or infrastructure.
Taken together, this relationship highlights that federal employment concentration is driven less by population size and more by institutional and geographic factors. As a result, changes in the federal workforce may have uneven economic impacts across states, particularly in those where federal employment represents a larger share of total jobs.
Exhibit 3: Federal Employment Share and State Population, March 2025, OPM Fedscope, CES, 2024 Census
These exhibits illustrate the role of federal employment across states, reflecting both the number of federal workers and their share of total employment. While large states employ the greatest number of federal workers in absolute terms, smaller or strategically positioned states often rely more heavily on federal employment as a stabilizing component of their labor markets. Regional patterns highlight the influence of proximity to Washington, D.C., military installations, and federally managed land on employment concentration. Taken together, these findings underscore the importance of viewing federal employment in relative terms when assessing its economic impact. For additional context on federal employment levels by state, see the previous article, How Many People Work for the Federal Government in Your State?
