ABSTRACT. This paper explores the determinants of population and employment densities interregionally. The theoretical model, due to Steinnes and Fisher, permits simultaneous determination of population and employment densities. This is applied to data for about 3,000 counties in the U.S. to analyze the effects of economic, demographic, climatic, and policy-related variables on the growth of population and employment, during the 1970s. Considering employment, differential county growth is explained in terms of economic and demographic conditions; regional and policy variables matter less. For population, climate matters as a preference for sunbelt states is found. Local government programs regarding education and tax policy seem to play a role.