A note on decompositions in fixed effects models in the presence of time-invariant characteristics
By: by Axel Heitmueller.
Series: Discussion paper ;; no. 1886; Discussion paper (Forschungsinstitut zur Zukunft der Arbeit : Online) ;; no. 1886
Publisher: IZA
Published: 2005
Place of publication: Bonn, Germany
Language: eng
Format: Electronic resource
Subjects: Regression analysis.; Monte Carlo method.; Panel analysis.
Description: "Though theoretically appealing and very popular amongst labour economists, the interpretation of the unexplained part of the Oaxaca (1973) decomposition as discrimination rather than an omitted variable problem in cross-section data has often been criticised. In this note it is shown that this problem extends also to panel data and moreover that in a fixed effects model including time invariant regressors omitted variables are a necessary and deliberate consequence. Monte Carlo simulation is used to show the extent of the bias. Special cases and practical implications are discussed"--Forschungsinstitut zur Zukunft der Arbeit web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 12/13/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.