Quasi-Experimental Shift-Share Research Designs

93 Pages Posted: 17 Sep 2018 Last revised: 21 Apr 2023

See all articles by Kirill Borusyak

Kirill Borusyak

University College London - Department of Economics

Peter Hull

University of Chicago - Becker Friedman Institute for Economics

Xavier Jaravel

London School of Economics & Political Science (LSE) - Department of Economics

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Date Written: September 2018

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.

Suggested Citation

Borusyak, Kirill and Hull, Peter and Jaravel, Xavier, Quasi-Experimental Shift-Share Research Designs (September 2018). NBER Working Paper No. w24997, Available at SSRN: https://ssrn.com/abstract=3246820

Kirill Borusyak (Contact Author)

University College London - Department of Economics

Drayton House, 30 Gordon Street
30 Gordon Street
London, WC1H 0AX
United Kingdom

Peter Hull

University of Chicago - Becker Friedman Institute for Economics ( email )

Chicago, IL 60637
United States

Xavier Jaravel

London School of Economics & Political Science (LSE) - Department of Economics ( email )

Houghton Street
London WC2A 2AE
United Kingdom
7456842728 (Phone)
NW12AR (Fax)

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