Wage Decompositions Using Panel Data Sample Selection Correction

26 Pages Posted: 6 Sep 2016

See all articles by Ronald L. Oaxaca

Ronald L. Oaxaca

University of Arizona - Department of Economics; IZA Institute of Labor Economics

Chung Choe

Hanyang University


This paper analyzes wage decomposition methodology in the context of panel data sample selection embedded in a correlated random effects setting. Identification issues unique to panel data are examined for their implications for wage decompositions. As an empirical example, we apply our methodology to German Socio-Economic Panel (GSOEP) data with which we investigate gender wage differentials in the German Labor Market. Our results highlight the sensitivity of inferences about potential discrimination to how elements of the panel data selection model are assigned to explained and unexplained components.

Keywords: decomposition, panel data, GSOEP, sample selection

JEL Classification: J31, J71, C00

Suggested Citation

Oaxaca, Ronald L. and Choe, Chung, Wage Decompositions Using Panel Data Sample Selection Correction. IZA Discussion Paper No. 10157, Available at SSRN: https://ssrn.com/abstract=2834187

Ronald L. Oaxaca (Contact Author)

University of Arizona - Department of Economics ( email )

McClelland Hall
Tucson, AZ 85721-0108
United States
520-621-4135 (Phone)
520-621-8450 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072

Chung Choe

Hanyang University ( email )

Korea, Republic of (South Korea)

HOME PAGE: http://https://sites.google.com/site/choechung/home

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