xtoaxaca - Extending the Kitagawa-Oaxaca-Blinder Decomposition Approach to Panel Data
The Kitagawa-Oaxaca-Blinder decomposition approach has been widely used to attribute group-level differences in an outcome to differences in endowment, coefficients, and their interactions. The method has been implemented for Stata in the popular oaxaca program for cross-sectional analyses. In the last decades, however, research questions have been more often focused on the decomposition of group-based differences in change over time, e.g. diverging income trajectories, as well as decomposition of change in differences between groups, e.g. change in the gender pay gap over time. We review five existing methods for the decomposition of changes in group means and contribute a complementing interventionist perspective, which is suitable for applications with a clear before-after comparison. These decompositions of levels and changes over time can be implemented using a first version of the program {\tt xtoaxaca}, which works as a postestimation command for different regression commands in Stata. It is built to maximize flexibility in modeling and implements all decomposition techniques presented in this paper.