Regional Workforce Dynamics in West Virginia: Insights from Shift-Share and Location Quotient Analysis

Abstract

West Virginia, home to approximately 1.77 million residents, has been grappling with significant economic challenges characterized by persistent poverty and sluggish growth. Despite ongoing development efforts, the state’s Gross State Product (GSP) has seen only a modest increase of 0.1% over the past five years, reaching USD 71.7 billion, while the unemployment rate remains at 4.0%. The annualized employment growth rate of 0.7% lags behind the national average, and only about 54% of West Virginia’s adult population is either employed or actively seeking employment, resulting in one of the lowest labor force participation rates in the nation. In contrast, certain industrial sectors, such as healthcare, social assistance, retail trade, and accommodation and food services, have shown intermittent growth at the county and regional levels. To explore the unique characteristics and significance of these regions in relation to employment growth, this study examines regional employment patterns in West Virginia from 2001 to 2020, focusing on the main regions of the state: Metro Valley, Mid-Ohio Valley, New River/Greenbrier Valley, Mountain Lakes, and Potomac Highlands. Utilizing shift-share and location quotient (LQ) analyses, this research identifies the sectors driving regional employment and assesses their performance. Key findings reveal strong sectoral performance in mining, manufacturing, and finance in the Mid-Ohio Valley; wholesale trade, transportation, and utilities in the Metro Valley; agriculture and administrative services in the New River/Greenbrier Valley; agriculture and manufacturing in the Potomac Highlands; and scientific services, healthcare, and utilities in the Mountain Lakes region. Based on these insights, this study recommends targeted policy interventions to address regional disparities, enhance sectors with significant short- and long-term benefits, and foster balanced economic development across the state.

Keywords

• shift-share analysis
• location quotient analysis
• economic growth