Economics at your fingertips  

Are Bartik Regressions Always Robust to Heterogeneous Treatment Effects?

Cl\'ement de Chaisemartin and Ziteng Lei

Papers from

Abstract: Bartik regressions use locations' differential exposure to nationwide sector-level shocks as an instrument to estimate the effect of a location-level treatment on an outcome. In the canonical Bartik design, locations' differential exposure to industry-level employment shocks are used as an instrument to measure the effect of their employment evolution on their wage evolution. Some recent papers studying Bartik designs have assumed that the sector-level shocks are exogenous and all have the same expectation. This second assumption may sometimes be implausible. For instance, there could be industries whose employment is more likely to grow than that of other industries. We replace that second assumption by parallel trends assumptions. Under our assumptions, Bartik regressions identify weighted sums of location-specific effects, with weights that may be negative. Accordingly, such regressions may be misleading in the presence of heterogeneous effects, an issue that was not present under the assumptions maintained in previous papers. Estimating the weights attached to Bartik regressions is a way to assess their robustness to heterogeneous effects. We also propose an alternative estimator that is robust to location-specific effects. Finally, we revisit two applications. In both cases, Bartik regressions have fairly large negative weights attached to them. Our alternative estimator is substantially different from the Bartik regression coefficient in one application.

Date: 2021-03
New Economics Papers: this item is included in nep-ecm
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this paper

More papers in Papers from
Bibliographic data for series maintained by arXiv administrators ().

Page updated 2021-03-22
Handle: RePEc:arx:papers:2103.06437