IDEAS home Printed from https://ideas.repec.org/p/boc/bocoec/1053.html
   My bibliography  Save this paper

Novel Shift-Share Instruments and Their Applications

Author

Listed:
  • Benjamin Ferri

    (Boston College)

Abstract

Shift-Share (Bartik) instruments are among the most important tools for causal identification in economics. In this paper, I crystallize main ideas underlying Shift-Share instruments - their core structure, distinctive claim to validity as instruments, history, uses, and wealth of varieties. I argue that the essence of the Shift-Share approach is to decompose the endogenous explanatory variable into an accounting identity with multiple component parts; preserve that which is most exogenous in the accounting identity, and neutralize that which is most endogenous. Following this framework, I show clearly how several variants in the literature are related. I then develop formulas for several new variants. Particularly, I show how to develop Shift-Share instruments for distribution summaries beyond the mean - the variance, skew, absolute deviation around a central point, and Gini coefficient. As an empirical application that highlights the themes of the paper, I measure the effect of earnings inequality on rates of single parenting in the U.S., comparing results using each of various alternative instruments for the Gini coefficient.

Suggested Citation

  • Benjamin Ferri, 2022. "Novel Shift-Share Instruments and Their Applications," Boston College Working Papers in Economics 1053, Boston College Department of Economics.
    • Handle: RePEc:boc:bocoec:1053
    as

    Download full text from publisher

    File URL: http://fmwww.bc.edu/EC-P/wp1053.pdf
    File Function: main text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gould, Eric D. & Paserman, M. Daniele, 2003. "Waiting for Mr. Right: rising inequality and declining marriage rates," Journal of Urban Economics, Elsevier, vol. 53(2), pages 257-281, March.
    2. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle, November.
    3. Card, David, 2001. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 22-64, January.
    4. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, American Economic Association, vol. 103(6), pages 2121-2168, October.
    5. Enamorado, Ted & López-Calva, Luis F. & Rodríguez-Castelán, Carlos & Winkler, Hernán, 2016. "Income inequality and violent crime: Evidence from Mexico's drug war," Journal of Development Economics, Elsevier, vol. 120(C), pages 128-143.
    6. Rebecca Diamond, 2016. "The Determinants and Welfare Implications of US Workers' Diverging Location Choices by Skill: 1980-2000," American Economic Review, American Economic Association, vol. 106(3), pages 479-524, March.
    7. Bound, John & Holzer, Harry J, 2000. "Demand Shifts, Population Adjustments, and Labor Market Outcomes during the 1980s," Journal of Labor Economics, University of Chicago Press, vol. 18(1), pages 20-54, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michael Amior & Alan Manning, 2018. "The Persistence of Local Joblessness," American Economic Review, American Economic Association, vol. 108(7), pages 1942-1970, July.
    2. Daniel A. Broxterman & William D. Larson, 2020. "An empirical examination of shift‐share instruments," Journal of Regional Science, Wiley Blackwell, vol. 60(4), pages 677-711, September.
    3. Eva-Maria Egger, 2022. "Internal Migration and Crime in Brazil," Economic Development and Cultural Change, University of Chicago Press, vol. 71(1), pages 223-259.
    4. Amior, Michael, 2018. "The contribution of foreign migration to local labor market adjustment," LSE Research Online Documents on Economics 91705, London School of Economics and Political Science, LSE Library.
    5. Ferdinando Monte & Stephen J. Redding & Esteban Rossi-Hansberg, 2018. "Commuting, Migration, and Local Employment Elasticities," American Economic Review, American Economic Association, vol. 108(12), pages 3855-3890, December.
    6. Brian C. Cadena & Brian K. Kovak, 2016. "Immigrants Equilibrate Local Labor Markets: Evidence from the Great Recession," American Economic Journal: Applied Economics, American Economic Association, vol. 8(1), pages 257-290, January.
    7. Juan Carlos Suárez Serrato & Owen Zidar, 2016. "Who Benefits from State Corporate Tax Cuts? A Local Labor Markets Approach with Heterogeneous Firms," American Economic Review, American Economic Association, vol. 106(9), pages 2582-2624, September.
    8. Michael Amior, 2019. "Education and geographical mobility: the role of the job surplus," CEP Discussion Papers dp1616, Centre for Economic Performance, LSE.
    9. Mike Zabek, 2024. "Local Ties in Spatial Equilibrium," American Economic Journal: Macroeconomics, American Economic Association, vol. 16(2), pages 287-317, April.
    10. Bryan A. Stuart, 2022. "The Long-Run Effects of Recessions on Education and Income," American Economic Journal: Applied Economics, American Economic Association, vol. 14(1), pages 42-74, January.
    11. Miriam Fritzsche, 2024. "De-industrialization, local joblessness and the male-female employment gap," Berlin School of Economics Discussion Papers 0040, Berlin School of Economics.
    12. Eric D Gould, 2019. "Explaining the Unexplained: Residual Wage Inequality, Manufacturing Decline and Low-skilled Immigration," The Economic Journal, Royal Economic Society, vol. 129(619), pages 1281-1326.
    13. Mr. Tamim Bayoumi & Jelle Barkema, 2019. "Stranded! How Rising Inequality Suppressed US Migration and Hurt Those Left Behind," IMF Working Papers 2019/122, International Monetary Fund.
    14. Ning Jia & Raven Molloy & Christopher Smith & Abigail Wozniak, 2023. "The Economics of Internal Migration: Advances and Policy Questions," Journal of Economic Literature, American Economic Association, vol. 61(1), pages 144-180, March.
    15. Amior, Michael, 2020. "Immigration, local crowd-out and undercoverage bias," LSE Research Online Documents on Economics 108490, London School of Economics and Political Science, LSE Library.
    16. David Albouy & Alex Chernoff & Chandler Lutz & Casey Warman, 2019. "Local Labor Markets in Canada and the United States," Journal of Labor Economics, University of Chicago Press, vol. 37(S2), pages 533-594.
    17. Moretti, Enrico & Hornbeck, Richard, 2018. "Who Benefits From Productivity Growth? Direct and Indirect Effects of Local TFP Growth on Wages, Rents, and Inequality," CEPR Discussion Papers 12953, C.E.P.R. Discussion Papers.
    18. Amior, Michael, 2020. "The contribution of immigration to local labor market adjustment," LSE Research Online Documents on Economics 108419, London School of Economics and Political Science, LSE Library.
    19. Bond, Timothy N. & Giuntella, Osea & Lonsky, Jakub, 2023. "Immigration and work schedules: Theory and evidence," European Economic Review, Elsevier, vol. 152(C).
    20. Sofía Fernández Guerrico, 2023. "Trade Shocks, Population Growth, and Migration," ULB Institutional Repository 2013/357236, ULB -- Universite Libre de Bruxelles.

    More about this item

    Keywords

    shift-share; bartik; instrumental variables; panel data; labor demand and supply; earnings inequality; single parenting;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:boc:bocoec:1053. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christopher F Baum (email available below). General contact details of provider: https://edirc.repec.org/data/debocus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.