Bartik Instruments: What, When, Why, and How

77 Pages Posted: 20 Mar 2018 Last revised: 12 Mar 2023

See all articles by Paul S. Goldsmith-Pinkham

Paul S. Goldsmith-Pinkham

Yale School of Management

Isaac Sorkin

Stanford University - Department of Economics

Henry Swift

Independent

Date Written: March 2018

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 three applications: estimating the elasticity of labor supply, estimating local labor market effects of Chinese imports, and estimating the elasticity of substitution between immigrants and natives.

Suggested Citation

Goldsmith-Pinkham, Paul S. and Sorkin, Isaac and Swift, Henry, Bartik Instruments: What, When, Why, and How (March 2018). NBER Working Paper No. w24408, Available at SSRN: https://ssrn.com/abstract=3143313

Paul S. Goldsmith-Pinkham (Contact Author)

Yale School of Management ( email )

NY
United States

HOME PAGE: http://paulgp.github.io

Isaac Sorkin

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
STANFORD, CA 94305-6072
United States

Henry Swift

Independent ( email )

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