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Inequality and a multiple subgroup-decomposition method

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Inequality and a multiple subgroup-decomposition method

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山口,雅生
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type:80 大阪経大学会「Working Paper」The Oaxaca-Blinder decomposition method is a popular and useful tool for analyzing multiple factors for inequality and it...

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Material Type
文書・図像類
Author/Editor
山口,雅生
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eng
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一般
Note (General)
type:80 大阪経大学会「Working Paper」
The Oaxaca-Blinder decomposition method is a popular and useful tool for analyzing multiple factors for inequality and its change. However, this method may suffer from regression errors such as the endogeneity problem and the questionable assumptions. The other popular tool for decomposing inequality and its change is subgroup decomposition. However, this method can identify not multiple factors but a single factor for inequality and its change. This paper proposes a multiple subgroup-decomposition method which can identify multiple factors for inequality and its changes without estimating wage or earning equations. An empirical application of this method is implemented to analyze the Japanese wage inequality for full-time workers on the basis of a micro-level data set obtained from the Employment Status Survey (1992-2002). It is found that wage inequality had a constant or slightly decreasing trend from 1992 to 1997, however, wage inequality increased from 1997 to 2002. The changes in overall wage inequality are partly due to the decreasing effect of between-age-group inequality and between-education-group inequality and increasing effect of between-firm-size-group inequality both from 1992 to 1997 and from 1997 to 2002. These decreasing effects of between-age-group inequality could be identified by the multiple subgroup-decomposition method, however, which could not identified by a traditional single subgroup-decomposition. Therefore, practitioners should use the multiple decomposition method when implementing the inequality decomposition precisely. Further, it is found that the factors for the expanding overall inequality from 1997 to 2002 are mainly attributed to the increase in within-group inequality for groups of identical age, education, and firm size. The increase may be caused by the extensive introduction of performance pay in the late 1990s.
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http://www.i-repository.net/il/user_contents/02/G0000031Repository/workingpaper/wp2012-8.pdf
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