TY - Journal Article
T1 - Identification Problem and Detailed Oaxaca Decomposition: A General Solution and Inference
JF - Journal of economic and social measurement
VL - 33
IS - 1
SP - 27
EP - 38
A1 - Yun, Myeong-Su
PB - IOS Press, B.V
PY - 2008
UR - https://bonnus.ulb.uni-bonn.de/SummonRecord/FETCH-LOGICAL-c3027-fa4e764562484ff7877f1cef8673e73e64da649f531fee5418e17c624af322830
N2 - It is well-known that the standard Oaxaca decomposition method on wage differentials produces arbitrary results when calculating the coefficients effect of sets of dummy variables: the estimated sum of coefficients effects of sets of dummy variables is not invariant to the choice of reference groups. We generalize this identification problem in the detailed Oaxaca decomposition and its solution based on a normalized equation to a decomposition analysis for differences in the first moment where linear or non-linear (e.g., probit or logit) models can be used for estimation. We provide a practical and simple algorithm to derive the normalized equation, and show that using normalized equation does not change the size and inference of the overall characteristics and coefficients effects. JEL classification: C20, J70 Keywords: Detailed decomposition, identification, characteristics effect, coefficients effect, normalized equation
KW - Algorithms
ER -