2018
DOI: 10.3390/econometrics6020028
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Decomposing Wage Distributions Using Recentered Influence Function Regressions

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 analyz… Show more

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Cited by 375 publications
(496 citation statements)
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“…These studies enable the analysis of the gender pay gap at the mean. Nine use quantile decomposition methods, such as the ones developed in Machado and Mata (2005) and Firpo, Fortin, and Lemieux (2007), that allow for the assessment of variation in the gap across the pay distribution. Two studies use the matching-based decomposition approach developed in Ñopo (2008).…”
Section: Methodsmentioning
confidence: 99%
“…These studies enable the analysis of the gender pay gap at the mean. Nine use quantile decomposition methods, such as the ones developed in Machado and Mata (2005) and Firpo, Fortin, and Lemieux (2007), that allow for the assessment of variation in the gap across the pay distribution. Two studies use the matching-based decomposition approach developed in Ñopo (2008).…”
Section: Methodsmentioning
confidence: 99%
“…The decomposition we propose follows Firpo et al (2007Firpo et al ( , 2009, which have recently shown that using the properties of Recentered Influence Functions (RIF) one can extend the traditional Oaxaca-Blinder decomposition to analyze distributional statistics beyond the mean (e.g., quantiles). Details on the method are found in the Appendix A.3.…”
Section: Structurementioning
confidence: 99%
“…The interpretation of the estimates γ t can be thought of as the effect of a small change in the distribution of X on q τ , or as linear approximation of the effect of large changes of X on q τ (Firpo et al, 2007).…”
Section: Argentinamentioning
confidence: 99%
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