Most applications of shift-share analysis to regional employment change have used a study period of several years and have examined conditions only at the beginning and end years. This comparative static approach does not take into account the continuous changes in both industrial mix and size of total employment of the region over the study period. Calculating the national growth effect. the industrial mix effect, and the competitive effect on an annual basis and then summing the results over the study period provides a more accurate allocation of job changes among the three shift-share effects. This approach, which we term dynamic shift-share analysis, also allows unusual years and years of economic transition to he identified. We illustrate the use of dynamic shift-share by presenting results of an analysis of New England employment growth from 1939 to 1984, using U.S. Bureau of Labor Statistics data. The use of the dynamic form of shift-share is important when the study period is characterized by either large changes in regional industrial mix or major differences between regional and national growth rates.HIFT-SHARE ANALYSIS is a relatively simple technique for an-S alyzing employment growth in a region over a specific time period.Fothergill and Gudgin (1979, p. 309) note that "shift-share fits the expectation that, when a technique is simple and apparently useful, it will be both widely used and heavily criticized." One set of criticisms arises from the temporal nature of the questions to which the technique is applied.' Most studies that use shift-share analysis have examined employment change over an interval of several years, and in so doing, considered conditions only at the beginning and end years of the time interval. This comparative static approach creates problems that we argue are eliminated by calculating the shift-share effects on an annual basis. We call this approach dynamic shiftshare analysis. We suggest that data availability and computational burdens, which at one time may have impeded the use of dynamic shift-share analysis, no longer form barriers to its application of an analysis of regional employment growth. We demonstrate the use of the dynamic shift-share approach with a brief case study of employment change in New England. Problems Associated with Comparative Static ApproachShift-share analysis decomposes employment growth (or decline) in a region over a given time period into three components: (1) a national growth Richard A . Bar8 is an assistant professor of geography at Dartmouth College. Prentice L. Knight III is Program Manager for the Industrial Development Research Council in Norcross, Georgia.

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This paper examines the role of military spending in the recent economic revival of New England, particularly the region's turnaround in employment growth. The long‐term re structuring of New England's economy after World War II in terms of industry mix and labor costs positioned the region for a turnaround. We argue that the precipitating factor in the liming of the was the significant increase starling in the late 1970s in federal military purchases of durable goods from [lie region's high‐technology manufacturing industry. New England benefited disproportionately from the military buildup because of the region's concentration in high‐technology manufacturing industries producing defense‐related goods. The labor‐intensive nature of high‐technology industry has resulted in a large portion of the money received from defense purchases going to labor and producing important regional multiplier effects in sectors other than manufacturing.