Shift-Share Designs in Political Science

TL;DR

This paper reviews shift-share designs in political science, discusses their methodological developments, and highlights the importance of understanding their causal assumptions for correct application.

Contribution

It introduces the shifter exogeneity framework, develops auxiliary theoretical results, and emphasizes its potential utility in political science research.

Findings

Shift-share designs are increasingly used in political science.

The shifter exogeneity framework is underutilized in the field.

The paper provides theoretical insights to improve application of shift-share methods.

Abstract

Shift-share designs are gaining popularity in political science. This article introduces what shift-share designs are, reviews their application in the literature, synthesizes recent methodological developments, and discusses their potential utility in the field. Although shift-share designs have a long historical use in economics, their causal properties only recently began to be understood. Articles in political science tend to be aware of these developments, but do not fully discuss and test identifying assumptions and sometimes apply the methods incorrectly. Most articles rely on the share exogeneity framework, suggesting that the shifter exogeneity framework is underutilized despite its comparable prevalence in economics. I illustrate shifter exogeneity framework and develop auxiliary theoretical results that are potentially useful in applying the framework in political science settings.