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Quasi-Experimental Shift-Share Research Designs

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

No 24997, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: C18 C21 C26 F16 J21 (search for similar items in EconPapers)
Date: 2018-09
New Economics Papers: this item is included in nep-lma
Note: ITI LS
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Published as Kirill Borusyak & Peter Hull & Xavier Jaravel & Dirk Krueger, 2022. "Quasi-Experimental Shift-Share Research Designs," The Review of Economic Studies, vol 89(1), pages 181-213.

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Working Paper: Quasi-Experimental Shift-Share Research Designs (2020) Downloads
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