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Oaxaca-Blinder Meets Kitagawa: What Is the Link?

Author

Listed:
  • Oaxaca, Ronald L.

    (University of Arizona)

  • Sierminska, Eva

    (Luxembourg Institute of Socio-Economic Research (LISER))

Abstract

Recently, papers have started combining the naming of two popular decomposition methods: the Oaxaca-Blinder method and the Kitagawa method, a popular method in demographics and sociology. Although the two approaches have the same objective in terms of decomposing outcome differences in some variable of interest between two populations, they are framed quite differently and do not overlap except in a special set of circumstances. Consequently, the combined labeling of these two approaches can be misleading. This note establishes the conditions under which the two methodologies are identical and when they are not. It also provides the citation history of the two methods and examples of "misuses" of the naming convention when the methods are not equivalent, accompanied by a proposal for the way forward.

Suggested Citation

  • Oaxaca, Ronald L. & Sierminska, Eva, 2023. "Oaxaca-Blinder Meets Kitagawa: What Is the Link?," IZA Discussion Papers 16188, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16188
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    References listed on IDEAS

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    1. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    2. David Neumark, 1988. "Employers' Discriminatory Behavior and the Estimation of Wage Discrimination," Journal of Human Resources, University of Wisconsin Press, vol. 23(3), pages 279-295.
    3. Chen, Yunwei & Sylvia, Sean & Wu, Paiou & Yi, Hongmei, 2022. "Explaining the declining utilization of village clinics in rural China over time: A decomposition approach," Social Science & Medicine, Elsevier, vol. 301(C).
    4. 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.
    5. 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.
    6. Songsermsawas, Tisorn & Kafle, Kashi & Winters, Paul, 2023. "Decomposing the impacts of an agricultural value chain development project by ethnicity and gender in Nepal," World Development, Elsevier, vol. 168(C).
    7. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
    8. Nora Waitkus & Lara Minkus, 2021. "Investigating the Gender Wealth Gap Across Occupational Classes," Feminist Economics, Taylor & Francis Journals, vol. 27(4), pages 114-147, October.
    9. Waitkus, Nora & Minkus, Lara, 2021. "Investigating the gender wealth gap across occupational classes," LSE Research Online Documents on Economics 108206, London School of Economics and Political Science, LSE Library.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    decomposition methods; economics; demography;
    All these keywords.

    JEL classification:

    • A10 - General Economics and Teaching - - General Economics - - - General
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • J0 - Labor and Demographic Economics - - General

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