Bartik Instruments: What, When, Why, and How
2020/07/28 by Paul Goldsmith-Pinkham, Isaac Sorkin, Henry Swift · 59 citations
Economics, Econometrics and Finance · Social Sciences · #Economic Policies and Impacts #Global trade and economics #Migration and Labor Dynamics
paper · doi:10.1257/aer.20181047
openalex publication_date 2020/07/28 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/31
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. (JEL C51, F14, J15, J22, L60, R23, R32)
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