Rotemberg Weight Package

This program estimates the Rotemberg weights outlined in Goldsmith-Pinkham, Sorkin and Swift (2019). Each weight returned corresponds to the misspecification elasticity for each individual instrument when using the Bartik instrument defined by the weights. The discussion below pertains to the Stata implementation -- see the R-code subdirectory for an R implementation.

Warning: The R implementation is currently slightly out of date.

Installation

To install the Stata package, clone or download this repo, and then copy bartik_weight.ado and bartik_weight.sthlp to your personal ado folder. You can find this folder using the sysdir command.

Example

In the code folder, we provide four example do-files that use the bartik_weight function: make_rotemberg_summary_ADH.do, make_rotemberg_summary_BAR.do, make_rotemberg_summary_CARD_college.do and make_rotemberg_summary_CARD_hs.do. We are only able to provide the data for make_rotemberg_summary_ADH.do directly here, as the others use data from IPUMS, which prohbits the posting of a full dataset. These files (and others) are available along with a discussion of the full replication here: https://github.com/paulgp/gpss_replication

Example 1: China Shock - make_rotemberg_summary_ADH.do

There are L commuting zones with T time periods in this example, with K industries. Hence, following Goldsmith-Pinkham, Sorkin and Swift (2019), there are LT observations and KT instruments, interacted with a time fixed effect for 1990, and 2000. In this example, industry shares are defined using the lagged (previous decade) industry share for a commuting zone.

For each of the KT instruments, bartik_weight.ado constructs a Rotemberg weight. This weight corresponds to the misspecification sensisitivty for that industry-period pair.

Example 2: Canonical Bartik - make_rotemberg_summary_BAR.do

There are L commuting zones with T time periods in this example, with K industries. Hence, following Goldsmith-Pinkham, Sorkin and Swift (2019), there are LT observations and KT instruments, where the industries are defined in the initial period (1980), interacted with a time fixed effect for 1980, 1990, and 2000. For this implementation, the controls are also taken in the inital period, and interacted with time fixed effects. Since we control for a commuting zone fixed effect, we exclude one time period of the controls, since it is not seperately identified.

For each of the KT instruments, bartik_weight.ado constructs a Rotemberg weight. This weight corresponds to the misspecification sensitivity for that industry-period pair.

Example 3: Immigrant Enclave - make_rotemberg_summary_CARD_hs.do and make_rotemberg_summary_CARD_college.do

There are L commuting zones in this example, with K origin countries. Hence, following Goldsmith-Pinkham, Sorkin and Swift (2019), there are L observations and K instruments, where the origin country shares are defined in 1980. The growth rates are the number of people arriving in the US from country k. This is done seperately for high-school level education and college-level education.

For each of the K instruments, bartik_weight.ado constructs a Rotemberg weight. This weight corresponds to the misspecification sensitivity for that origin-country.

How to construct a dataset from the bartik_weight output

The final output from the Stata packages is returned in three Stata matrices. I provide examples on how to convert these outputs into readable and labelled data in both examples above, and repeat the code here:

bartik_weight, z(t*_`ind_stub'*)    weightstub(t*_`growth_stub'*) x(`x') y(`y') \\\
    controls(`controls'  ) weight_var(`weight')
mat beta = r(beta)
mat alpha = r(alpha)
mat gamma = r(gam)
mat pi = r(pi)
mat G = r(G)
qui desc t*_`ind_stub'*, varlist
local varlist = r(varlist)

clear
svmat beta
svmat alpha
svmat gamma
svmat pi
svmat G

gen ind = ""
gen year = ""
local t = 1
foreach var in `varlist' {
	if regexm("`var'", "t(.*)_`ind_stub'(.*)") {
		qui replace year = regexs(1) if _n == `t'
		qui replace ind = regexs(2) if _n == `t'
		}
	local t = `t' + 1
	}

Author

• Paul Goldsmith-Pinkham -- Contact me at @paulgp or paulgp [at] gmail [dot] com

License

This project is licensed under the MIT License - see the LICENSE.md file for details