Decomposing Wage Distributions using Recentered Influence Function Regressions

By Sergio Firpo, Nicole M. Fortin, Thomas Lemieux. 2018

549 citations recorded by the source corpus.

This paper provides a detailed exposition of an extension of the Oaxaca-Blinder decomposition method that can be applied to various distributional measures. The two-stage procedure first divides distributional changes into a wage structure effect and a composition effect using a reweighting method. Second, the two components are further divided into the contribution of each explanatory variable using recentered influence function (RIF) regressions. We illustrate the practical aspects of the procedure by analyzing how the polarization of U.S. male wages between the late 1980s and the mid 2010s was affected by factors such as de-unionization, education, occupations, and industry changes.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/785964c5afea6f865d765af9814b5b4c997d757c

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

Fernando Ríos‐Avila

Citations in the corpus

Recentered influence functions (RIFs) in Stata: RIF regression and RIF decomposition (2020, methodology): “They include the statistics from FFL(2018), Firpo and Pinto (2016), Chung and Vankerm (2018), Cowell and Flachaire (2007), Essama-Nssah and Lambert (2012) and Heckley et al (2016).”
CENTRAL BANK POLICIES AND INCOME AND WEALTH INEQUALITY: A SURVEY (2019, unknown): “17 Alternatively, Montecino and Epstein (2015) follow an approach suggested by Firpo et al. (2007) which combines recentered inﬂuence function regressions with a decomposition method to analyze distributional effects of QE in the USA.”
When Do Covariates Matter? And Which Ones, and How Much? (2016, unknown): “Regarding nonlinearity, Firpo, Fortin and Lemieux (2011) discuss a decomposition method for nonlinear situations using the recentered influence function approach of Firpo, Fortin and Lemieux (2009); see also Fortin, Lemieux and Firpo (2007). Other decomposition methods for nonlinear situations are s”