Quasi-Experimental Shift-Share Research Designs

By Kirill Borusyak, Peter Hull, Xavier Jaravel. The Review of Economic Studies, 2018

901 citations recorded by the source corpus.

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.

View Paper: https://www.semanticscholar.org/paper/3442930bce396756084427a08b2012240e0139b0

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

Citations in the corpus

AI and Jobs: Evidence from Online Vacancies (2020, result): “Appendix Table A2 repeats Table 1 with standard errors from Borusyak et al (2021), with similar results.”
Optimal Inflation and the Identification of the Phillips Curve (2019, background): “See Borusyak, Hull, and Jaravel (2018); Goldsmith-Pinkham, Sorkin, and Swift (2018); and Jaeger, Ruist, and Stuhler (2018) for recent critical discussions of the use of these instruments.”
New Frontiers: The Origins and Content of New Work, 1940–2018 (2022, background): “The first-stage coefficient at the industry level (Borusyak et al. 2021) is 1.20 for imports from the U.S. onto imports from other countries, with a t-statistic of 5.82.”
Venting Out: Exports During a Domestic Slump (2018, background): “It is worth highlighting that although our instrument has a shift-share flavor, it does not strictly fall in the class of shift-share instruments studied recently by Adão et al. (2018), Borusyak et al. (2019) and Goldsmith-Pinkham et al. (2020), among others.”
Urban revival in America (2020, unknown): “27Recent work on Bartik instruments (Borusyak et al., 2018; Goldsmith-Pinkham et al., 2019) recommend exploring which industries drive variation in the instrument.”
Benign Effects of Automation: New Evidence from Patent Texts (2018, unknown): “We use employment data by the Census County Business Patterns (CBP).14 As shown by Goldsmith-Pinkham et al. (2018) and Borusyak et al. (2018), this measure is exogenous if either the shares (i.e., the employment shares) or the shocks (i.e., the automation patents) are exogenous.”