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Extending the Kitagawa–Oaxaca–Blinder decomposition approach to panel data

Author

Listed:
  • Hannes Kröger

    (German Institute for Economic Research (DIW))

  • Jörg Hartmann

    (Georg-August-Universität Göttingen)

Abstract

The Kitagawa–Oaxaca–Blinder decomposition approach has been widely used to attribute group-level differences in an outcome to differences in en- dowment, coefficients, and their interactions. The method has been implemented for Stata in the popular oaxaca command for cross-sectional analyses. In recent decades, however, research questions have been more often focused on the decom- position of group-based differences in change over time, for example, diverging income trajectories, as well as decomposition of change in differences between groups, for example, change in the gender pay gap over time. We review five exist- ing methods for the decomposition of changes in group means and contribute an extension that takes an interventionist perspective suitable for applications with a clear before–after comparison. These decompositions of levels and changes over time can be implemented using the xtoaxaca command, which works as a postestimation command for different regression commands in Stata. It is built to maximize flexibility in modeling and implements all decomposition techniques presented in this article.

Suggested Citation

  • Hannes Kröger & Jörg Hartmann, 2021. "Extending the Kitagawa–Oaxaca–Blinder decomposition approach to panel data," Stata Journal, StataCorp LP, vol. 21(2), pages 360-410, June.
    • Handle: RePEc:tsj:stataj:v:21:y:2021:i:2:p:360-410
    DOI: 10.1177/1536867X211025800
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    Cited by:

    1. Bachmann, Ronald & Demir, Gökay & Green, Colin P. & Uhlendorff, Arne, 2022. "The Role of Within-Occupation Task Changes in Wage Development," IZA Discussion Papers 15647, Institute of Labor Economics (IZA).
    2. James C. Davis & Holden A. Diethorn & Gerald R. Marschke & Andrew J. Wang, 2021. "STEM Employment Resiliency During Recessions: Evidence from the COVID-19 Pandemic," NBER Working Papers 29568, National Bureau of Economic Research, Inc.
    3. Kriesi, Irene & Sander, Fabian, 2024. "Academic or vocational education? A comparison of the long-term wage development of academic and vocational tertiary degree holders," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 58, pages 1-10.
    4. Oaxaca, Ronald L. & Sierminska, Eva, 2023. "Oaxaca-Blinder Meets Kitagawa: What Is the Link?," IZA Discussion Papers 16188, Institute of Labor Economics (IZA).
    5. Gibbs, Daniel J. & Villodas, Melissa L. & Kainz, Kirsten & Francis, Annie M., 2023. "Insecure housing, substance abuse, and incarceration among emerging adults aging out of foster care: Examining associations with legal orphan status," Children and Youth Services Review, Elsevier, vol. 145(C).
    6. Irene Kriesi & Fabian Sander, 2024. "Academic or vocational education? A comparison of the long-term wage development of academic and vocational tertiary degree holders," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 58(1), pages 1-28, December.

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