What does shift-share analysis specifically measure?

Shift-share analysis specifically measures changes in employment across industries by breaking down the overall employment growth in a region into three components: national growth, industry mix, and local effect. This analytical technique helps to determine whether employment changes in a region are due to broader economic trends, shifts within specific industries, or unique local conditions.

In conducting shift-share analysis, one typically evaluates how much of the employment change can be attributed to the growth of the national economy, how much is due to the composition of industries in that region, and how much represents the influence of local factors. This method allows analysts to pinpoint which sectors are growing or declining relative to others and assess the performance of a region's economy compared to national trends.

The other options do not accurately describe the focus of shift-share analysis. For instance, while it may touch on costs within industries, that is not its primary purpose; instead, the emphasis is on employment data. Similarly, forecast accuracy in budgeting and population demographics do not pertain to the essence of what shift-share analysis aims to measure, which is centered around employment fluctuations across various sectors. Thus, the correct answer effectively captures the core intent of shift-share analysis.