Arizona ranked 15th in federal government employment with 45,745, according to an analysis detailed by Eller’s Economic and Business Research Center.

The Federal government came to a halt on October 1, 2025, marking the beginning of what would become the longest shutdown in U.S. history. For 43 days, nearly 3 million federal employees were furloughed or went without pay. With the government restarting operations in November, these workers have already returned to their posts; since many employees missed paychecks, the economic effects of the shutdown may persist beyond the resumption of normal operations.

READ MORE: Here’s why the Arizona economy is poised to accelerate

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Within any given state, federal government employment varies drastically by department and agency, and each department is treated differently during government shutdowns. Understanding this breakdown reveals not only where federal workers are concentrated but also which communities and economies are most vulnerable to disruptions in federal operations.

The Office of Personnel Management (OPM) compiles and verifies data on federal employment to analyze the federal workforce and support decision-making on human resource issues throughout the federal government. Agencies submit data through two main channels: biweekly dynamic submissions that reflect personnel actions, and monthly status submissions that provide workforce snapshots. OPM releases this data quarterly, typically three to four months after the reporting period.

As of March 2025, Arizona was home to over 45,000 federal employees. The Department of Veterans Affairs dominated Arizona’s federal employment with 11,269 positions, followed by the Department of Homeland Security with 9,701 employees, and the Department of Health and Human Services with 4,482. Notably, the top two Departments of Federal government employment in Arizona are more than twice the size of any other, highlighting their importance to the state’s federal workforce. Exhibit 1 presents Arizona federal employment by department, sorted by size.

Exhibit 1: Federal Employment in Arizona by Department, March 2025, OPM Fedscope

Federal workers are concentrated in populous and coastal states, with California, Virginia, Florida, and New York leading in employment. California tops the list with 181,726 federal employees, followed by Texas with 170,616 and Virginia with 167,352. On the other hand, Delaware ranked last in Federal employment (3,963), followed by Vermont (5,105) and New Hampshire (5,431).

The Department of Veterans Affairs accounts for a substantial share of federal employment nationwide, with the Veterans Health Administration (VHA) ranking as the largest federal employer in 39 states, including Arizona. In Arizona, the VHA alone makes up 22.2% of the state’s federal employment. Among the top three states, California and Texas rank the VHA as their top source of federal employment; however, Virginia presents a notable exception, with the U.S. Fleet Forces Command as its largest federal employer, reflecting the state’s significant military presence.

As previously mentioned, the Department of Veterans Affairs dominates federal employment, accounting for nearly a fifth of the total federal workforce, with 473,261 employees. The Department of Homeland Security ranks second with 231,173 employees, followed by the Department of the Navy with 219,248. Together, these figures underscore how federal employment heavily concentrates in national defense and veterans’ services.

Exhibit 2 presents total federal employment by department across the United States, with the total listed at the bottom. In many ways, these employment figures offer insight into the government’s operational priorities, as employment levels reveal which services are being delivered and the scale at which they operate.

Exhibit 2: Top 25 Sources of Federal Employment by Department, March 2025, OPM Fedscope

While federal employment represents a relatively small share of the nation’s 160+ million jobs, it plays an outsized role in economic stability. Federal positions can help cushion communities against the volatility of business cycles, providing steady employment during economic downturns. Yet this same stabilizing force can become a vulnerability during events such as government shutdowns, when the reliability of federal paychecks is temporarily disrupted. Further insights could be gained by comparing these employment levels to their total state workforces. Still, this breakdown offers a starting point for understanding how federal employment shapes the communities it serves.