nopodec: Decomposition of the observed difference between averages of...

In gibonet/decr: Tools to Perform Decompositions of Differences Between Two Groups

Decomposition of the observed difference between averages of y of group A and B in 4 components, as in Nopo (2008).

Description

The decomposition of the difference is like that developed by Nopo (2008), especially regarding the two components out of support. The decomposition in the common support is instead done with the reweighting approach proposed by Di Nardo, Fortin and Lemieux (1996).

Usage

nopodec(.nopodec_, counterfactual = c("AB", "BA"))

Arguments

.nopodec_	output of nopodec_mean.
counterfactual	"AB" or "BA". "AB" means that we want to estimate the counterfactual (wage) of group A, as if their characteristics were distributed as in group B. "BA" is the opposite (characteristics of group B are balanced to those of group A).

Value

a list with five components:

• delta_total: total observed difference between average (wages) of group A and B;

• delta_A: part of the observed difference due to the fact that there are indidivuals of group A which are not comparable, for features, to individuals of group B;

• delta_X part explained by the fact that the two groups have a different distribution of characteristics;

• delta_S part not justified by the different distributions of the characteristics of the two groups, and potentially due to a difference in the remuneration structures between the two groups;

• delta_B part of the difference due to the fact that there are individuals of group B with characteristics that none of the group A has.

References

Nopo, H. 2008. Matching as a Tool to Decompose Wage Gaps. Review of Economics and Statistics, 90(2): 290-299.

DiNardo J., N. M. Fortin and T. Lemieux. 1996. Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach. Econometrica 64 (5): 1001-44

Examples

data(invented_wages)

# Common support and computation of counterfactual weights
r00 <- reweight_strata_all2(data = invented_wages,
                            treatment = "gender",
                            variables = c("sector", "education"),
                            y = "wage",
                            weights = "sample_weights")

# Computation of the elements necessary to the decomposition
n00 <- nopodec_mean(r00)

# Nopo decomposition
nopodec(n00, counterfactual = "AB")

gibonet/decr documentation built on Jan. 5, 2024, 7:26 a.m.