Abstract:

The Shift-Share analysis is an effective tool that is widely applied in regional economic research to understand regional growth change during a certain period. The objective of this paper is to review the recent growth performance of the Sabaragamuwa Province which is nine provinces in Sri Lanka, applying the Shift Share tool to give an insight into its growth performance for effective policy formulation. Employment data were taken for this analysis from the Annual Report of Sri Lanka Labour Force Survey conducted by the Department of Census and Statistics in the year 2013 and 2018 and Excel spreadsheets were used to perform the analysis. According to the statistics, the province has reported a negative change in employment during the period of 2013-2018 indicating a huge job loss. According to the Shift Share analysis, it is found that this job loss was primarily due to the unfavorable National Share (NS) since the overall national growth rate of the country was minus during this analysis period. The Industry Mix (IM) effect was considerably favorable since 70 percent of industries were able to increase their jobs. Agriculture is the main industry which lost a large number of jobs due to the declining trend of the agricultural sector at the national level. Results also show that the region is fairly competitive since its overall Regional Share (RS) value was positive representing a job-saving at the regional level. This job saving is due to the 40 percent of leading industries in the regions. Agriculture is the main industry sector which has performed well in the region. Results of the analysis suggest that a strong policy intervention both at the regional and the national level is essential to boost up the growth performance of the region.