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A General Approach to Effect Decomposition

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  • Feng Hou

Abstract

type="main"> This article illustrates the commonality among the Oaxaca decomposition, mediation analysis, and path analysis used in various social science fields to decompose the effect of a predictor on the outcome into constituent components. A general approach is proposed that extends the Oaxaca decomposition to continuous predictors. It also removes one critical restriction on covariates in mediation analysis. An empirical example shows that the effect of fathers’ education on children's years of schooling primarily works through children's early skill development and educational aspirations. The proposed approach is easy to implement since it requires only two pieces of information: simple correlations and standardized regression coefficients.

Suggested Citation

  • Feng Hou, 2014. "A General Approach to Effect Decomposition," Social Science Quarterly, Southwestern Social Science Association, vol. 95(3), pages 894-904, September.
    • Handle: RePEc:bla:socsci:v:95:y:2014:i:3:p:894-904
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    File URL: http://hdl.handle.net/10.1111/ssqu.12074
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    References listed on IDEAS

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    1. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
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    Cited by:

    1. Feng Hou, 2017. "The resettlement of Vietnamese refugees across Canada over three decades," WIDER Working Paper Series wp-2017-188, World Institute for Development Economic Research (UNU-WIDER).
    2. Feng Hou & Yuqian Lu, 2017. "International students, immigration and earnings growth: the effect of a pre-immigration host-country university education," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-24, December.
    3. Sunoong Hwang & Heeju Shin, 2023. "Gender Gap in Mental Health during the COVID-19 Pandemic in South Korea: A Decomposition Analysis," IJERPH, MDPI, vol. 20(3), pages 1-14, January.
    4. Aneta Bonikowska & Feng Hou & Garnett Picot, 2017. "New Immigrants Seeking New Places: The Role of Policy Changes in the Regional Distribution of New Immigrants to Canada," Growth and Change, Wiley Blackwell, vol. 48(1), pages 174-190, March.
    5. Feng Hou, 2017. "The resettlement of Vietnamese refugees across Canada over three decades," WIDER Working Paper Series 188, World Institute for Development Economic Research (UNU-WIDER).

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