A practical guide to shift-share instruments
Borusyak, K., Hull, P. & Jaravel, X.
(2025).
A practical guide to shift-share instruments.
Journal of Economic Perspectives,
39(1), 181-204.
https://doi.org/10.1257/jep.20231370
(2025).
A practical guide to shift-share instruments.
Journal of Economic Perspectives,
39(1), 181-204.
https://doi.org/10.1257/jep.20231370
A recent econometric literature shows two distinct paths for identification with shift-share instruments, leveraging either many exogenous shifts or exogenous shares. We present the core logic of both paths and practical takeaways via simple checklists. A variety of empirical settings illustrate key points.