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Title: Bartik Instruments: What, When, Why, and How

Citation Type: Journal Article

Publication Year: 2020

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Abstract: 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.

Url: https://www.aeaweb.org/articles?id=10.1257/aer.20181047

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Authors: Goldsmith-Pinkham, Paul; Sorkin, Isaac; Swift, Henry

Periodical (Full): American Economic Review

Issue: 8

Volume: 110

Pages: 2586-2624

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure

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