CO:STA Workshop Decomposition Methods

A typical question for social scientists is why (two) groups differ with respect to a property of interest.  Women earn lower wages on average than men do but they achieve higher PISA scores on average. Men have a higher incidence to leave school without completion. What is the role of compositional differentials and group specific determinants on the level of the property of interest? We could also be interested in the question, whether pensioner households contributed to an increased income inequality in Germany. The course gives an overview on how to engage such questions. We start with the classical Oaxaca-Blinder-decomposition, which models groups’ contributions to mean differentials.  This technique is the corner stone of many other decompositions methods, like the Fairly decomposition for group differentials in probabilities and the decomposition of group specific contributions to quantile values. Within the course, we will link the new gained statistical knowledge with Stata sessions, which will focus on working time differentials between genders in Germany.