The Contribution of Micropolitan Areas to a State’s Economy: A Shift-Share Case Study for Kansas

Using Kansas as a case study and employing shift-share analysis, this paper examines the economic performance of a state’s micropolitan areas, relative to that state’s metropolitan areas. Employment and output data are examined for the period 2010 through 2022. To smooth out the various external shocks and cyclical fluctuations of this extended period, five-year estimated averages for 2006-2010 and 2018-2022 for industry-level employment were used to calculate the growth rates for the shift-share components. The results indicate that both micropolitan and metropolitan areas in Kansas grew more slowly than the overall national average due to the existing mix of industries. While this effect was considerably worse for micropolitan areas, the allocation effect indicates that micropolitan areas were more specialized in industries favorable for future growth while metropolitan areas were specialized in unfavorable industries. This suggests that smaller cities in Kansas may be relatively more responsive in transforming local economies to structural changes. The shift-share analysis also revealed that Kansas micropolitan areas are as diverse as the state’s metropolitan areas and therefore economic development efforts must be tailored to each area’s specific economic circumstances.