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Title: Bartik Instruments: What, When, Why, and How
Citation Type: Miscellaneous
Publication Year: 2017
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Abstract: We demystify and formalize the Bartik instrument. The Bartik instrument is formed by interacting local industry shares and national industry growth rates. We show that the Bartik instrument is equivalent to using local industry shares as instruments. Hence, the identifying assumption is best stated in terms of these shares, with the national industry growth rates only affecting instrument relevance. This insight applies to a variety of “Bartik-like” instruments. We consider three tests of this identifying assumption and implement them in the context of the canonical application of estimating the inverse elasticity of labor supply.
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Authors: Goldsmith-Pinkham, Paul; Sorkin, Isaac; Swift, Henry
Publisher: Federal Reserve Bank of New York
Data Collections: IPUMS USA
Topics: Labor Force and Occupational Structure
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