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Quasi-Experimental Shift-Share Research Designs

Kirill Borusyak (), Peter Hull () and Xavier Jaravel

Papers from arXiv.org

Abstract: Many empirical studies leverage shift-share (or "Bartik") instruments that average a set of observed shocks with shock exposure weights. We derive a necessary and sufficient shock-level orthogonality condition for these instruments to identify causal effects. We then show that orthogonality holds when observed shocks are as-good-as-randomly assigned and growing in number, with the average shock exposure sufficiently dispersed. Quasi-experimental shift-share designs may be implemented with new shock-level procedures, which help visualize the identifying variation, correct standard errors, choose appropriate specifications, test identifying assumptions, and optimally combine multiple sets of quasi-random shocks. We illustrate these ideas by revisiting Autor et al. (2013)'s analysis of the labor market effects of Chinese import competition

Date: 2018-06, Revised 2018-09
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http://arxiv.org/pdf/1806.01221 Latest version (application/pdf)

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Working Paper: Quasi-Experimental Shift-Share Research Designs (2018) Downloads
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