Do You (or Someone You Know) Use a Shift-Share Instrument?

I know it's been a while, but I'm back! Grades submitted. Late referee report submitted. And I even submitted a new paper to a journal today. I'm ready to get back to blogging! 

What better way to celebrate my return than to discuss two new papers (Goldsmith-Pinkham et al. 2018 and Jaeger et al. 2018) on using shift-share (AKA Bartik, AKA Card 2001) instruments! I have read one of these rather carefully but haven't yet gotten to the other. In any case, David Mackenzie has come through once again by providing a nice intuitive explanation of both papers. Read the blog entry but also read Tim Bartik's very careful response to the blog entry and the two papers. Yes, the very same Bartik of the Bartik instrument. 

My remarks: If we were going to limit ourselves to only writing papers with absolutely no shred of concern about identification, I think we would all be running RCTs. That might be fun but it would substantially limit the number of important questions we could answer (albeit imperfectly). As Tim Bartik writes, the question is often not whether the IV is flawless but whether it is better than the OLS. 

All of that said, I absolutely agree and feel very strongly that authors have a responsibility to know the limitations of their work and to be very straightforward about those limitations. Goldsmith-Pinkham et al. 2018 and Jaeger et al. 2018 have each provided some important tools for evaluating our IV analyses. As a frequent user of these instruments, I say thank you. But please don't start rejecting my papers. ;)