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Quasi-experimental shift-share research designs

Borusyak, Kirill, Hull, Peter and Jaravel, Xavier (2022) Quasi-experimental shift-share research designs. Review of Economic Studies, 89 (1). 181 - 213. ISSN 0034-6527

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Identification Number: 10.1093/restud/rdab030

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.

Item Type: Article
Additional Information: © 2021 The Author(s)
Divisions: Economics
Subjects: H Social Sciences > HB Economic Theory
JEL classification: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods: General > C10 - General
C - Mathematical and Quantitative Methods > C2 - Econometric Methods: Single Equation Models; Single Variables > C21 - Cross-Sectional Models; Spatial Models; Treatment Effect Models
F - International Economics > F1 - Trade > F16 - Trade and Labor Market Interactions
J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J21 - Labor Force and Employment, Size, and Structure
Date Deposited: 06 Jan 2023 15:45
Last Modified: 17 May 2024 07:03
URI: http://eprints.lse.ac.uk/id/eprint/117788

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