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Mix Effect

In shift share analysis, this reflects regional growth that can be attributed to positive trends in the specific industry or occupation at a national level. For example, nursing jobs might be growing in your region and that’s great. However, looking at the national trends for nursing jobs reveals that they’re growing most everywhere. In this case, your region isn’t necessarily “excelling” at providing nursing jobs; they’re doing well everywhere, and every region in the country will likely see some growth as a result.

The industrial mix effect is the number of jobs we would expect to see added (or lost) within an industry in your region, based on the industry’s national growth/decline. If the industry is growing or declining at the national level, it can dependably grow or decline in smaller regions.

Industrial mix effect is calculated by applying the job growth of the industry at the national level to the same industry at the regional level. We start by subtracting the national growth rate of the overall economy from the national growth rate of the specific industry. This gives us a national industry premium which is an indication of how much that industry outperformed or underperformed the economy as a whole nationwide.

Industry Growth Rate – National Economy Growth Rate = Industry Premium

This rate (a percentage) is then applied to the number of the industry’s regional jobs:

Industry Premium x Number of Regional Industry Jobs = Industrial Mix Effect

See this longer article on shift share and its component parts.

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