Used in both industry and occupation contexts, this is a standard method of regional economic analysis that attempts to separate either regional growth into its component causes. The three main causes identified are the “national growth effect” which is regional growth that can be attributed to the overall growth of the entire National economy; the “mix effect” which is regional growth that can be attributed to positive trends in the specific industry or occupation at a national level; and the “regional competitiveness effect” which is growth that cannot be explained by either overall or industry/occupation-specific trends. The result of the calculation and most important of the three is the “competitive effect,” which, because it’s isolating region specific growth, demonstrates a particular regional strength. Shift share analysis is practical because it provides a larger perspective on regional job growth, allowing researchers to measure the extent and source of job change in a region. See also National Growth Effect and Mix Effect and Competitive Effect and Expected Change. For a more narrative explanation of Shift Share, see this knowledge base article.
Source: Emsi’s proprietary employment data.