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A Practical Guide to Shift-Share Instruments

Kirill Borusyak et al.

Journal of Economic Perspectives2025https://doi.org/10.1257/jep.20231370article
AJG 4ABDC A*
Weight
0.78

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.

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https://doi.org/https://doi.org/10.1257/jep.20231370

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@article{kirill2025,
  title        = {{A Practical Guide to Shift-Share Instruments}},
  author       = {Kirill Borusyak et al.},
  journal      = {Journal of Economic Perspectives},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1257/jep.20231370},
}

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A Practical Guide to Shift-Share Instruments

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Evidence weight

0.78

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact1.00 × 0.4 = 0.40
M · momentum1.00 × 0.15 = 0.15
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.