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Are Bartik Regressions Always Robust to Heterogeneous Treatment Effects?

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  • Clément de Chaisemartin

    (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)

  • Ziteng Lei

    (Renmin University of China = Université Renmin de Chine)

Abstract

Bartik regressions use locations' differential exposure to nationwide sector-level shocks as an instrument to estimate the effect of a location-level treatment on an outcome. We show that under parallel-trends assumptions, Bartik regressions may estimate weighted sums of location-and-period-specific treatment effects, with some negative weights. Accordingly, they may not be robust to heterogeneous effects across locations or periods. We provide simple diagnostic tools researchers may use to assess the robustness of their regression. Finally, we propose alternative correlated-random-coefficient estimators that are more robust to heterogeneous effects than Bartik regressions. We use our results to revisit two empirical applications.

Suggested Citation

  • Clément de Chaisemartin & Ziteng Lei, 2022. "Are Bartik Regressions Always Robust to Heterogeneous Treatment Effects?," SciencePo Working papers Main hal-03873913, HAL.
    • Handle: RePEc:hal:spmain:hal-03873913
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03873913
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    1. David Autor & David Dorn & Gordon Hanson & Kaveh Majlesi, 2020. "Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure," American Economic Review, American Economic Association, vol. 110(10), pages 3139-3183, October.
    2. Clément de Chaisemartin & Xavier D'Haultfœuille, 2020. "Two-Way Fixed Effects Estimators with Heterogeneous Treatment Effects," American Economic Review, American Economic Association, vol. 110(9), pages 2964-2996, September.
    3. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, American Economic Association, vol. 103(6), pages 2121-2168, October.
    4. Joseph G. Altonji & David Card, 1991. "The Effects of Immigration on the Labor Market Outcomes of Less-skilled Natives," NBER Chapters, in: Immigration, Trade, and the Labor Market, pages 201-234, National Bureau of Economic Research, Inc.
    5. Michael Greenstone & Alexandre Mas & Hoai-Luu Nguyen, 2020. "Do Credit Market Shocks Affect the Real Economy? Quasi-experimental Evidence from the Great Recession and "Normal" Economic Times," American Economic Journal: Economic Policy, American Economic Association, vol. 12(1), pages 200-225, February.
    6. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle, August.
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