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Bartik Instruments: What, When, Why, and How

Bartik Instruments: What, When, Why, and How Paul Goldsmith-PinkhamIsaac SorkinHenry SwiftNovember 2019 AbstractThe Bartik instrument is formed by interacting local industry shares and nationalindustry growth rates. We show that the typical use of a Bartik instrument assumesa pooled exposure research design, where the shares measure differential exposure tocommon shocks, and identification is based on exogeneity of the shares. Next, we showhow the Bartik instrument weights each of the exposure designs. Finally, we discusshow to assess the plausibility of the research design. We illustrate our results throughthree applications: estimating the elasticity of labor supply, estimating local labor mar-ket effects of Chinese imports, and estimating the elasticity of substitution betweenimmigrants and natives.

Bartik Instruments: What, When, Why, and How Paul Goldsmith-Pinkham Isaac Sorkin Henry Swift November 2019 Abstract The Bartik instrument is formed by interacting local industry shares and national

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