Impact of remittances on household health care expenditure: Evidence from the Nepal Living Standards Survey

This paper examines the effect of remittance inflows on health care expenditure in Nepal using the Nepal Living Standards Survey 2010–2011. Using the recursive three‐stage least square regression method, the propensity score matching method, and the Oaxaca–Blinder decomposition method, we find a positive and significant effect of remittances on health care expenditure. In particular, our analysis shows a 0.099% increase in health care expenditure for every 1% increase in overall remittances. This effect increases to 0.189% for earned remittances (remittances received from a household member). We also find that remittance‐receiving households with at least one migrant family member have different health care spending behavior than those with no migrant members.     

Inequality in Vietnamese Urban–Rural Living Standards, 1993–2006

We investigate urban–rural inequality in Vietnam using data from the Vietnam Living Standard Surveys between 1993 and 2006. We find that mean per capita expenditure of urban households is consistently twice as much as that of rural households and that the urban–rural gap monotonically increases from the poorer to the richer groups of the expenditure distribution. To isolate factors contributing to the urban–rural gap, we apply the Oaxaca–Blinder type decomposition to a newly developed unconditional quantile regression method. Factors contributing significantly to the high urban–rural gap include inter‐group differences in education, household age structure, labor market activity, geographic location and their related returns, with education playing the most important role. Over the period, consistent with the country's massive rural–urban migration, we find that domestic remittance plays a significant role in shortening the urban–rural expenditure gap in the later years, 2002 and 2006.     

The poverty experience of lone mothers and their children

Lone mothers, as sole caregivers and women, face unique challenges to guaranteeing the economic well-being of their children compared to lone fathers. While all lone parents face a trade-off in time spent earning wages and time spent caring for children, mothers are likely to earn wages lower than fathers, thus increasing their chances of falling into poverty. Using data from the U.S. Census Bureau’s 2013 Current Population Survey, we estimate the size of the gender poverty gap among lone-parent families. We apply the Oaxaca–Blinder decomposition to assess whether this gap can be solely attributed to parent and family demographics. Much of the poverty gap, however, is attributed to unobservables, suggesting the increased likelihood of being in poverty for lone-mothered families may be, in part, due to gender-based discrimination in labour markets.     

Educational performance gaps in Eastern Europe

To assess the educational performance gaps in Eastern Europe, this article takes a look at the differences in PISA test scores between Finland and seven Eastern European countries, as well as between Eastern European countries. The methodology applied is a semiparametric version of the threefold Blinder–Oaxaca decomposition. We find that main part of the average test score gap cannot be explained by the individual characteristics. Furthermore, our analysis at different quantiles provides evidence that the average test score gaps are due to the fact that poorly performing students in Finland score much higher than poorly performing students in Eastern Europe.     

LIVING STANDARDS INEQUALITY BETWEEN MIGRANTS AND LOCAL RESIDENTS IN URBAN CHINA—A QUANTILE DECOMPOSITION

This study investigates the inequality in per‐capita consumption expenditure between urban and rural‐to‐urban migrant households in China using Rural‐Urban Migration in China (RUMiC) data. The methodology used is that of Oaxaca‐Blinder and unconditional quantile decompositions and we deal with selection related to education level using matching. It is found that the characteristics effect does not contribute toward explaining any of the gaps in consumption. Results from a detailed decomposition suggest that differences in educational level account for 8%–19% of the overall inequality after taking selectivity of education into consideration. Differences in household size and region of residence are also important in narrowing expenditure inequality between the two groups. (JEL R23, C15)     

The use of quantile regressions in estimating gender wage differentials: a case study of the Philippines

Quantile regressions are used to analyse the size, components, and nature of the gender-earnings differentials as well as the returns to education by gender in the Philippines, over the entire conditional distribution of earnings, using data from the 1999 APIS survey. This approach allows more focused conclusions about the nature of gender-earnings differentials. Incorporating the quantile regression approach to the Oaxaca–Blinder decomposition allows the localization of gender discrimination to particular quantiles of the earnings distribution and permits more targeted policy intervention.     

Fuel poverty and access to electricity: comparing households when they differ in needs

Although sequential stochastic dominance techniques have been used in the literature to make comparisons of income poverty which are robust to the assumptions made about the economies of scale within households, the techniques could be applied to a much wider set of issues. In this paper, these techniques are applied to energy deprivation in Guatemala. Fuel poverty is compared among households with and without access to electricity, and it is assessed whether access to electricity for those who do not have access currently would eliminate the observed difference in fuel poverty between the two groups of households.     

Decomposing the German East–West wage gap

Wages in East Germany are persistently lower than in West Germany. We study the micro‐level determinants of this spatial wage gap, using an Oaxaca–Blinder decomposition and rich linked employer–employee data. In total, up to one half of the aggregate wage differential can be attributed to structural differences in worker, establishment and regional characteristics. Regional price and establishment size differentials alone account for one quarter of the wage gap at the median. Price level differentials are even more relevant towards the top of the wage distribution. Towards the bottom, differences in union coverage become more important. Our findings are quite stable over the period from 1996 to 2010.     

Understanding the Gender Gap in Financial Literacy: Evidence from Australia

Using micro‐data from the Household, Income and Labour Dynamics in Australia Survey, and the Oaxaca–Blinder decomposition technique, this paper examines the determinants of the gender gap in financial literacy. The analysis suggests that human capital variables, such as age and education, are not important in explaining the gender gap in financial literacy. Labour market variables, such as sector, occupation, industry, union membership and labour market status, are important and explain around 16 per cent of the gap. This finding is dependent on the assumption that these variables are exogenous. There is a large unexplained gap, suggesting that the main determinants are neither human capital nor labour market factors.     

ANALYSIS OF POVERTY AND EFFICIENCY: AN EARNINGS FRONTIER APPROACH

The paper introduces the concept of an earnings frontier in explaining monthly consumption expenditure (a proxy for income) in terms of human capital and endowments of a household. Individuals who translate their potential earning into actual earnings enjoy a fully efficient position. In contrast, individuals who earn less than their potential earnings suffer from some kind of earnings inefficiency. The paper estimates an earnings frontier using the Corrected Ordinary Least Square (COLS) method and classifies households in terms of efficiency scores. Splitting the sample into an efficient and an inefficient part based on the estimated frontier and a bench mark efficiency score, the status of poverty in the two parts (groups) is studied. The poverty gap between the groups is then decomposed into a characteristics effect and a coefficients effect using the familiar Oaxaca decomposition methodology. The paper also tries to establish a link between the notion of efficiency and the coefficients effect in the Oaxaca decomposition methodology. The results obtained are interpreted in light of the poor but efficient hypothesis.     

Blinder–Oaxaca decomposition for Tobit models

In this article, a decomposition method for Tobit models is derived, which allows the differences in observed outcome variables between two groups to be decomposed into a part that is explained by differences in observed characteristics and a part attributable to differences in the estimated coefficients. Monte Carlo simulations demonstrate that in the case of censored dependent variables this decomposition method produces more reliable results than the conventional Blinder–Oaxaca decomposition for linear regression models. Finally, our method is applied to a decomposition of the gender wage gap using German data.     

Gender Wage Gap: Some Recent Evidences from India

Gender wage inequality is a chronic socioeconomic malice in developed as well as in developing countries. This paper describes the outcomes of our study on the estimation of gender wage gap in the Indian labour market, using the 68th Round NSSO employment–unemployment data. The study uses Blinder–Oaxaca decomposition technique and Heckman two-step methodology, for removal of selectivity bias in the sample data, to measure the components of total gender wage gap, viz. (1) occupational segregation (explained by economic rationale) and (2) direct discrimination (not explained by economic rationale). The analysis indicates that the maximum direct discrimination is for job-related factors, such as industry type which are controlled by employers. The majority of the Indian employers today are men, which may be the reason for the insensitivity to the chronic direct discrimination against women in workplaces. The study also indicates that most of the explained gender wage gap is due to lower skill and experience amongst women. The findings suggest that besides labour law reforms for ensuring gender neutrality in workplaces, focused government policies for promoting women entrepreneurship and skill development of women are urgently required for reducing the gender wage gap in India.

     

Bayesian Unconditional Quantile Regression: An Analysis of Recent Expansions in Wage Structure and Earnings Inequality in the US 1992–2009

We develop Bayesian inference for an unconditional quantile regression model. Our approach provides better estimates in the upper tail of the wage distribution as well as valid small sample confidence intervals for the Oaxaca–Blinder decomposition. We analyze the recent changes in the US wage structure using data from the CPS Outgoing Rotation Group from 1992 to 2009. We find that the largest part of the recent changes is explained mainly by differences in returns to education while the decline in the unionization rate has a small impact, and that earnings inequality is rising more at the top end of the wage distribution.     

POVERTY IN RURAL INDIA: CASTE AND TRIBE

This paper analyzes the determinants of rural poverty in India, contrasting the situation of scheduled caste (SC) and scheduled tribe (ST) households with the non-scheduled population. The incidence of poverty in SC and ST households is much higher than among non-scheduled households. By combining regression estimates for the ratio of per capita expenditure to the poverty line and an Oaxaca-type decomposition analysis, we study how these differences in the incidence of poverty arise. We find that for SC households, differences in characteristics explain the gaps in poverty incidence more than differences in transformed regression coefficients. In contrast, for ST households, differences in the transformed regression coefficients play the more important role.     

Immigration policy and employment assimilation in the United States

We examine the impact of immigration policy on the employment propensity and assimilation of immigrants using a pooled cross-section of the 1994–2004 Current Population Surveys (CPS). The results are generally consistent with positive immigrant employment assimilation. A Blinder–Oaxaca style decomposition shows that the foreign-born obtain more employment primarily through human capital acquisition and changes in labour market conditions rather than higher returns to observable skills, as sometimes seen in wage studies. In addition, our analysis suggests that immigration policies may influence both labour demand and supply incentives and are associated with structural shifts in the labour market.     

Gender-Based Occupational Choices and Family Responsibilities: The Gender Wage Gap in Italy

This paper explores the relationship between the gender division of labor, occupational choices, and the gender wage gap in Italy. In Italy, cultural factors and low availability of formal childcare services define gender roles that are generally based on the male breadwinner model, in which childcare is almost completely entrusted to women. The analysis is carried out through an extension of the Oaxaca–Blinder decomposition and is based on data from the 2007 Italian National Institute for Workers’ Professional Development (ISFOL). The results are consistent with gender discrimination on wages and suggest that women’s occupational paths are often an outcome of limited choices, and that women’s unpaid domestic work negatively interferes with the energy women can put into paid work. These findings support the need to ensure gender equality in and out of the labor market, especially through deep changes in Italian social norms and through the development of formal childcare.     

The Russian–Ukrainian earnings divide1

Ethnic differences are often considered to be powerful sources of diverse economic behaviour. In this article, we investigate to what extent ethnicity affects Ukrainian labour market outcomes. Using microdata from the Ukrainian Longitudinal Monitoring Survey and the Oaxaca–Blinder decomposition of earnings, we find a persistent and increasing labour market divide between ethnic Russians and Ukrainians throughout Ukraine’s transition era. We establish that language, rather than nationality, is the key factor behind this ethnic premium favouring Russians. Our findings further document that this premium is larger amongst males than females.     

工资差异均值分解的一种新改进

本文在评述Oaxaca、Blinder、Cotton和Neumark等学者关于"指数基准问题"(index number problem)研究之演进及其局限的基础上,提出并论证了一种更具解释力的"无歧视工资结构"新形式,以更准确地推断Oaxaca-Blinder分解中歧视的大小程度。文章在对指数基准进一步挖掘、矫正和逼近的同时,从理论抽象和现实操作两个层面优化了工资差异的均值分解,深化了对歧视的理解和刻画。     

Air conditioning and electricity expenditure: The role of climate in temperate countries

This paper investigates how households adopt and use air conditioning to adapt to climate change and increasingly high temperatures, which pose a threat to the health of vulnerable populations. The analysis examines conditions in eight temperate, industrialized countries (Australia, Canada, France, Japan, the Netherlands, Spain, Sweden, and Switzerland). The identification strategy exploits cross-country and cross-household variations by matching geocoded households with climate data. Our findings suggest that households respond to excess heat by purchasing and using air conditioners, leading to increased electricity consumption. Households on average spend 35%–42% more on electricity when they adopt air conditioning. Through an illustrative analysis, we show that climate change and the growing demand for air conditioning are likely to exacerbate energy poverty. The number of energy poor who spend a high share of income on electricity increases, and households in the lowest income quantile are the most negatively affected.     

Are children driving the gender wage gap?

We examine how much children and the responsibilities related to them contribute to the divergence of men's and women's wages, and consequently, to the formation of the gender wage gap. To derive the relative contribution of gender‐specific parent gaps to the overall gender wage gap, we provide a modification of the Oaxaca–Blinder decomposition and include simultaneous corrections for selection into employment and parenthood. The results show that the fatherhood wage premium contributes most significantly to the gender wage gap, especially in Poland. The motherhood penalty is also significant, while the role of the gender gap among childless individuals is small.