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  4. Winter 2025
  5. A Practical Guide to Shift-Share Instruments

Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

A Practical Guide to Shift-Share Instruments

  • Kirill Borusyak
  • Peter Hull
  • Xavier Jaravel
Journal of Economic Perspectives
vol. 39, no. 1, Winter 2025
(pp. 181–204)
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Abstract

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.

Citation

Borusyak, Kirill, Peter Hull, and Xavier Jaravel. 2025. "A Practical Guide to Shift-Share Instruments." Journal of Economic Perspectives 39 (1): 181–204. DOI: 10.1257/jep.20231370

Additional Materials

JEL Classification

  • C26 Single Equation Models: Single Variables: Instrumental Variables (IV) Estimation
  • R15 General Regional Economics: Econometric and Input-Output Models; Other Models
  • J23 Labor Demand
  • J82 Labor Standards: Labor Force Composition
  • R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics