Quasi-experimental shift-share research designs

Kirill Borusyak, Peter Hull and Xavier Jaravel

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Many studies use shift-share (or "Bartik") instruments, which average a set of shocks with exposure share weights. We provide a new econometric framework for shift-share instrumental variable (SSIV) regressions in which identification follows from the quasi-random assignment of shocks, while exposure shares are allowed to be endogenous. The framework is motivated by an equivalence result: the orthogonality between a shift-share instrument and an unobserved residual can be represented as the orthogonality between the underlying shocks and a shock-level unobservable. SSIV regression coefficients can similarly be obtained from an equivalent shock-level regression, motivating shock-level conditions for their consistency. We discuss and illustrate several practical insights of this framework in the setting of Autor et al. (2013), estimating the effect of Chinese import competition on manufacturing employment across U.S. commuting zones.

Keywords: Bartik instruments; instrumental variables; quasi-experiments; shift-share instruments (search for similar items in EconPapers)
JEL-codes: C10 C21 F16 J21 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2022-01-01
New Economics Papers: this item is included in nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (167)

Published in Review of Economic Studies, 1, January, 2022, 89(1), pp. 181 - 213. ISSN: 0034-6527

Downloads: (external link)
http://eprints.lse.ac.uk/117788/ Open access version. (application/pdf)

Related works:
Journal Article: Quasi-Experimental Shift-Share Research Designs (2022)
Working Paper: Quasi-Experimental Shift-Share Research Designs (2020)
Working Paper: Quasi-Experimental Shift-Share Research Designs (2020)
Working Paper: Quasi-Experimental Shift-Share Research Designs (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:117788

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