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Oaxaca-Blinder decomposition of changes in means and inequality: A simultaneous approach

Author

Listed:
  • Arthur Charpentier

    (UQAM)

  • Emmanuel Flachaire

    (Aix-Marseille University, AMSE)

Abstract

In this paper, we show that a decomposition of changes in inequality, with the mean log deviation index, can be obtained directly from the Oaxaca-Blinder decompositions of changes in means of incomes and log-incomes. It allows practitioners to conduct simultaneously empirical analyses to explain which factors account for changes in means and in inequality indices between two distributions with strictly positive values.

Suggested Citation

  • Arthur Charpentier & Emmanuel Flachaire, 2024. "Oaxaca-Blinder decomposition of changes in means and inequality: A simultaneous approach," Economics Bulletin, AccessEcon, vol. 44(1), pages 308-320.
    • Handle: RePEc:ebl:ecbull:eb-23-00234
    as

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    References listed on IDEAS

    as
    1. DiNardo, John & Fortin, Nicole M & Lemieux, Thomas, 1996. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Econometrica, Econometric Society, vol. 64(5), pages 1001-1044, September.
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    4. Frank A Cowell & Emmanuel Flachaire, 2018. "Inequality Measurement and the Rich: Why inequality increased more than we thought," STICERD - Public Economics Programme Discussion Papers 36, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    5. Myeong-Su Yun, 2005. "A Simple Solution to the Identification Problem in Detailed Wage Decompositions," Economic Inquiry, Western Economic Association International, vol. 43(4), pages 766-772, October.
    6. Ronald L. Oaxaca & Michael R. Ransom, 1999. "Identification in Detailed Wage Decompositions," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 154-157, February.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Inequality; Oaxaca-Blinder decomposition; MLD index;
    All these keywords.

    JEL classification:

    • Y1 - Miscellaneous Categories - - Data: Tables and Charts
    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General

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