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Decomposing Wage Distributions Using Recentered Influence Function Regressions Firpo, Sergio P.; Fortin, Nicole M.; Lemieux, Thomas

Abstract

This paper provides a detailed exposition of an extension of the Oaxaca-Blinder decomposition method that can be applied to various distributional measures. The two-stage procedure first divides distributional changes into a wage structure effect and a composition effect using a reweighting method. Second, the two components are further divided into the contribution of each explanatory variable using recentered influence function (RIF) regressions. We illustrate the practical aspects of the procedure by analyzing how the polarization of U.S. male wages between the late 1980s and the mid 2010s was affected by factors such as de-unionization, education, occupations, and industry changes.

Item Metadata

Title
Decomposing Wage Distributions Using Recentered Influence Function Regressions
Creator
Firpo, Sergio P.; Fortin, Nicole M.; Lemieux, Thomas
Publisher
Multidisciplinary Digital Publishing Institute
Date Issued
2018-05-25
Description
This paper provides a detailed exposition of an extension of the Oaxaca-Blinder decomposition method that can be applied to various distributional measures. The two-stage procedure first divides distributional changes into a wage structure effect and a composition effect using a reweighting method. Second, the two components are further divided into the contribution of each explanatory variable using recentered influence function (RIF) regressions. We illustrate the practical aspects of the procedure by analyzing how the polarization of U.S. male wages between the late 1980s and the mid 2010s was affected by factors such as de-unionization, education, occupations, and industry changes.
Subject
Decomposition methods; RIF-regressions; Wage inequality
Genre
Article
Type
Text
Language
eng
Date Available
2019-06-25
Provider
Vancouver : University of British Columbia Library
Rights
CC BY 4.0
DOI
10.14288/1.0379597
URI
http://hdl.handle.net/2429/70773
Affiliation
Arts, Faculty of; Non UBC; Vancouver School of Economics
Citation
Econometrics 6 (2): 28 (2018)
Publisher DOI
10.3390/econometrics6020028
Peer Review Status
Reviewed
Scholarly Level
Faculty
Rights URI
https://creativecommons.org/licenses/by/4.0/
Aggregated Source Repository
DSpace

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CC BY 4.0