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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. 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.
    2. 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.
    3. 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.
    4. 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.
    5. Altonji, Joseph G. & Blank, Rebecca M., 1999. "Race and gender in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 48, pages 3143-3259, Elsevier.
    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.
    7. Frenette, Marc, 2007. "Why Are Youth from Lower-income Families Less Likely to Attend University? Evidence from Academic Abilities, Parental Influences, and Financial Constraints," Analytical Studies Branch Research Paper Series 2007295e, Statistics Canada, Analytical Studies Branch.
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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. Jeremiah Richey & Alicia Rosburg, 2020. "Decomposing joint distributions via reweighting functions: an application to intergenerational economic mobility," Econometric Reviews, Taylor & Francis Journals, vol. 39(6), pages 541-558, July.
    3. Daina Chiba & Tobias Heinrich, 2019. "Colonial Legacy and Foreign Aid: Decomposing the Colonial Bias," International Interactions, Taylor & Francis Journals, vol. 45(3), pages 474-499, May.
    4. Brantly Callaway & Weige Huang, 2020. "Distributional Effects of a Continuous Treatment with an Application on Intergenerational Mobility," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(4), pages 808-842, August.
    5. Fernando Rios-Avila, 2019. "A Semi-Parametric Approach to the Oaxaca–Blinder Decomposition with Continuous Group Variable and Self-Selection," Econometrics, MDPI, vol. 7(2), pages 1-29, June.

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    More about this item

    Keywords

    Oaxaca decomposition; Wage gap; Education attainment;
    All these keywords.

    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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