Which analysis assesses employment changes by industry relative to the national economy?

Shift-share analysis is a method used to evaluate how employment changes in a specific region or industry compare to overall national trends. This analysis breaks down the changes in employment into three components: national growth effects, industry mix effects, and regional competitiveness effects.

The national growth effect assesses what would happen in a region if it simply mirrored national employment growth. The industry mix effect identifies how much of the change can be attributed to the performance of specific industries within the region compared to the national average. Lastly, the regional competitiveness effect highlights how much of the employment change is the result of the local economy's ability to attract and retain jobs relative to national trends.

This approach provides a clear framework for understanding the dynamics of employment changes and helps policymakers and economists identify strengths and weaknesses in regional economic performance. Thus, shift-share analysis effectively assesses employment changes by industry in relation to the broader national economy, clarifying how specific regions are performing in a competitive context.