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The Oaxaca decomposition generalized to a continuous group variable

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  • Ulrick, Shawn W.

Abstract

Almost universally, the Oaxaca (1973) decomposition is used to compare the outcomes between two discrete groups, e.g., black and white. In many applications, however, groups are not readily divided into discrete bins. The purpose of this paper is to extend the Oaxaca decomposition to examine differences amongst groups that are most naturally modeled as at points in a continuum. The gap can vary by values of the group variable.

Suggested Citation

  • Ulrick, Shawn W., 2012. "The Oaxaca decomposition generalized to a continuous group variable," Economics Letters, Elsevier, vol. 115(1), pages 35-37.
  • Handle: RePEc:eee:ecolet:v:115:y:2012:i:1:p:35-37 DOI: 10.1016/j.econlet.2011.11.037
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    References listed on IDEAS

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    1. Alberto Chong & José Galdo & Jaime Saavedra-Chanduví, 2007. "Informality and Productivity in the Labor Market: Peru 1986 - 2001," Research Department Publications 4526, Inter-American Development Bank, Research Department.
    2. Ñopo, Hugo, 2008. "An extension of the Blinder-Oaxaca decomposition to a continuum of comparison groups," Economics Letters, Elsevier, vol. 100(2), pages 292-296, August.
    3. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    4. Donohue, John J, III & Levitt, Steven D, 2001. "The Impact of Race on Policing and Arrests," Journal of Law and Economics, University of Chicago Press, vol. 44(2), pages 367-394, October.
    5. Mats Bergman & Malcolm Coate & Maria Jakobsson & Shawn Ulrick, 2010. "Comparing Merger Policies in the European Union and the United States," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 36(4), pages 305-331, June.
    6. Stephen V. Cameron & James J. Heckman, 2001. "The Dynamics of Educational Attainment for Black, Hispanic, and White Males," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 455-499, June.
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    Cited by:

    1. Richey, Jeremiah & Rosburg, Alicia, 2016. "Understanding intergenerational economic mobility by decomposing joint distributions," MPRA Paper 72665, University Library of Munich, Germany.
    2. Richey, Jeremiah & Rosburg, Alicia, 2016. "Decomposing Joint Distributions via Reweighting Functions: An Application to Intergenerational Economic Mobility," MPRA Paper 74744, University Library of Munich, Germany.

    More about this item

    Keywords

    Oaxaca decomposition; Wage gap; Education attainment;

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • J7 - Labor and Demographic Economics - - Labor Discrimination

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