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Title: Decomposing Joint Distributions via Reweighting Functions: An Application to Intergenerational Economic Mobility
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Richey, Jeremiah Rosburg, Alicia |
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Decomposing Joint Distributions via Reweighting Functions: An Application to Intergenerational Economic Mobility Econometric Reviews 39,6 (2020): 541-558. Also: https://www.tandfonline.com/doi/full/10.1080/07474938.2019.1697088 Cohort(s): NLSY79 Publisher: Taylor & Francis Group Keyword(s): Household Income; Intergenerational Patterns/Transmission; Male Sample; Mobility, Economic; Statistical Analysis Permission to reprint the abstract has not been received from the publisher. We introduce a method that extends the traditional Oaxaca-Blinder decomposition to both the full distribution of an outcome of interest and to settings where group membership varies along a continuum. We achieve this by working directly with the joint distribution of outcome and group membership and comparing it to an independent joint distribution. Like all decompositions, we assume the difference is partially due to differences in characteristics between groups (a composition effect) and partially due to differences in returns to characteristics between groups (a structure effect). We use reweighting functions to estimate a counterfactual joint distribution representing the hypothetical if characteristics did not vary according to group while returns to characteristics did. The counterfactual allows us to decompose differences between the empirical and independent distributions into composition and structure effects. We demonstrate the method by decomposing multiple measures of immobility for white men in the U.S. |
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Bibliography Citation
Richey, Jeremiah and Alicia Rosburg. "Decomposing Joint Distributions via Reweighting Functions: An Application to Intergenerational Economic Mobility." Econometric Reviews 39,6 (2020): 541-558.
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