Bartik Instruments: What, When, Why, and How

By Paul Goldsmith-Pinkham, Isaac Sorkin, Henry Swift. The American Economic Review, 2020

1,930 citations recorded by the source corpus.

The Bartik instrument is formed by interacting local industry shares and national industry growth rates. We show that the typical use of a Bartik instrument assumes a pooled exposure research design, where the shares measure differential exposure to common shocks, and identification is based on exogeneity of the shares. Next, we show how the Bartik instrument weights each of the exposure designs. Finally, we discuss how to assess the plausibility of the research design. We illustrate our results through two applications: estimating the elasticity of labor supply, and estimating the elasticity of substitution between immigrants and natives. (JEL C51, F14, J15, J22, L60, R23, R32)

Subfields: Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/e4da35778c869be2e3b893183b384a51734f6444

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Citations in the corpus

Misinformation During a Pandemic (2020, neutral): “9For example, Hmielowski et al. (2014) find that viewership of Fox News decreases trust in scientists, and Brzezinski et al.”
Stock Market Wealth and the Real Economy: A Local Labor Market Approach (2019, methodology): “This exposition illustrates the connection between our research design and the more general shift-share design studied in Goldsmith-Pinkham et al. (2018) and Borusyak et al. (2018).”
Quasi-Experimental Shift-Share Research Designs (2018, neutral): “It is intuitive that the cross-sectional dependence between s`n and ε` will not asymptotically vanish when N is fixed (as in Goldsmith-Pinkham et al. (2020)) and each νn shock contributes significantly to the residual, causing ε̄n 6 p −→ 0 for some or all n.”
Income Growth and the Distributional Effects of Urban Spatial Sorting (2019, positive): “The second term captures the travel (35)Many of our robustness exercises are similar in spirit to those suggested by Goldsmith-Pinkham et al. (2018). Goldsmith-Pinkham et al.”
Venting Out: Exports During a Domestic Slump (2018, methodology): “(2020) and Goldsmith-Pinkham et al. (2020), among others. Building on this literature, we report standard errors for the first-stage and for the second-stage coefficients that we compute following the procedure described in Adão et al. (2019). The standard errors estimated with this procedure are on”
Gifts of the Immigrants, Woes of the Natives: Lessons from the Age of Mass Migration (2019, neutral): “26As discussed in Goldsmith-Pinkham et al. (2018), the key identifying assumption of Bartik-style instruments (a class of instruments that includes also the shift-share) can be stated in terms of the initial shares.”