Data and Programs
Data and Programs from Fortin (2022)
Comments on Buckman, Choi, Daly, and Seitelman, "The Economic Gains from Equity." Federal Reserve Bank of San Francisco, 2021, pp. 112-130, Brookings Papers on Economic Activity, Fall 2021 Conference
This discussion of The Economics Gains from Equity by Buckman, Choi, Daly, and Seitelman (2021) comes from viewpoint of the labor economist in terms of policies that might help materialize the gains. These policies include immigration policies, affirmative action measures, and labor market institutions, namely, labor unions and minimum wages. These two last sets of measures long protected the most vulnerable workers, including minorities. Indeed, Farber and others (2021) find that from the 1940s to the 1990s, unions conferred a sizeable (10–20 percent) family income premia to non-white and less educated households, who were overrepresented among union members. Using compelling research designs, Derenoncourt and Montialoux (2021) show that the 1967 extension of the minimum wage accounts for more than 20 percent of the reduction in the racial earnings and income gap during the civil rights era. However, these institutions have been eroded since the 1980s (DiNardo, Fortin, and Lemieux 1996), a decade earlier than the facts documented in this paper. The stylized facts presented below will suggest a potential role for the erosion of institutions in the lack of improvement in the labor market outcomes of minority groups, especially Black workers.
Data and Programs from Fortin, Lemieux, and Llyod (2021)
Labor Market Institutions and the Distribution of Wages: The Role of Spillover Effects (joint with Thomas Lemieux and Neil Llyod) Journal of Labor Economics, Forthcoming May 2021.
This paper examines the role of spillover effects of minimum wages and threat effects of unionization in changes in wage inequality in the United States between 1979 and 2017. A distribution regression framework is introduced to estimate both types of spillover effects. Threat effects double the contribution of de-unionization to the increase in male wage inequality. Spillover effects magnify the explanatory power of declining minimum wages to two-thirds of the increase in inequality at the bottom end of the female wage distribution.
Data and Programs from Firpo, Fortin, and Lemieux (2018)
Decomposing Wage Distributions using Recentered Influence Function Regressions (joint with Sergio Firpo, and Thomas Lemieux) Econometrics, 2018, 6(28).
This updated 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.
Ado.files (package st0588 from http://www.stata-journal.com/software/sj20-1 ) for RIF-regression using additional poverty and inequality measures and Oaxaca-RIF
Rios-Avila, Fernando. "Recentered influence functions (RIFs) in Stata: RIF regression and RIF decomposition." The Stata Journal 20, no. 1 (2020): 51-94.
illustrated in
Rios Avila, Fernando. "Recentered influence functions in Stata: Methods for analyzing the determinants of poverty and inequality." Levy Economics Institute, Working Paper 927 (2019).
Occupational Task Indexes from the following paper
Inequality and Changes in Task Prices: Within and Between Occupation Effects (joint with Thomas Lemieux) Research in Labor Economics, Special issue on Inequality: Causes and Consequences, 43 (2016):195-226.
This paper seeks to connect changes in the structure of wages at the occupation level to measures of the task content of jobs. We first present a simple model where skills are used to produce tasks, and changes in task prices are the underlying source of change in occupational wages. Using Current Population Survey (CPS) wage data and task measures from the O*NET, we document large changes in both the within and between dimension of occupational wages over time, and find that these changes are well explained by changes in task prices likely induced by technological change and offshoring.
Data and Programs from Fortin, Lemieux, and Firpo (2011)
Decomposition Methods. (with S. Firpo and T. Lemieux) in Handbook of Labor Economics, Vol. 4, chap. 1.
This chapter provides a comprehensive overview of decomposition methods that have been developed since the seminal work of Oaxaca and Blinder in the early 1970s. These methods are used to decompose the difference in a distributional statistic between two groups, or its change over time, into various explanatory factors. While the original work of Oaxaca and Blinder considered the case of the mean, our main focus is on other distributional statistics besides the mean such as quantiles, the Gini coefficient or the variance. We discuss the assumptions required for identifying the different elements of the decomposition, well as various estimation methods proposed in the literature. We also illustrate how these methods work in practice by discussing existing applications and working through a set of empirical examples throughout the paper.
RIF Regression (*.ado files)from Firpo, Fortin and Lemieux (2009)
Unconditional Quantile Regressions (with S. Firpo and T. Lemieux) Econometrica, 77 (May 2009): 953-973.
We propose a new regression method to estimate the impact of explanatory variables on quantiles of the unconditional (marginal) distribution of an outcome variable. The proposed method consists of running a regression of the (recentered) influence function (RIF) of the unconditional quantile on the explanatory variables. The influence function is a widely used tool in robust estimation that can easily be computed for each quantile of interest. We show how standard partial effects, as well as policy effects, can be estimated using our regression approach. We propose three different regression estimators based on a standard OLS regression (RIF-OLS), a logit regression (RIF-Logit), and a non-parametric logit regression (RIF-OLS). We also discuss how our approach can be generalized to other distributional statistics besides quantiles. link to paper not available.
Instructions: simply unzip the files into the directory "c:\ado\plrus\r" or equivalent, and use STATA help command for the syntax of the procedure. The following program shows how to produce a graph of the estimated unconditional partial effect of union coverage: graph_rifreg_coef1.do using the mock dataset usmen0305_two. Simply download and save in an appropriate directory before running.
Data and Examples from DiNardo, Fortin, and Lemieux [DFL] (1996)
Labour Market Institutions and the Distribution of Wages, 1973-1992: a Semiparametric Approach. (with J. DiNardo and T. Lemieux) Econometrica, 64 (September 1996): 1001-1046.
This paper presents a semiparametric procedure to analyze the effects of institutional and labor market factors on recent changes in the U.S. distribution of wages. The effects of these factors are estimated by applying kernel density methods to appropriately weighted samples. The procedure provides a visually clear representation of where in the density of wages these various factors exert the greatest impact. Using data from the Current Population Survey, we find, as in previous research, that de-unionization and supply and demand shocks were important factors in explaining the rise in wage inequality from 1979 to 1988. We find also compelling visual and quantitative ,evidence that the decline in the real value of the minimum wage explains a substantial proportion of this increase in wage inequality, particularly for women. We conclude that labor market institutions are as important as supply and demand considerations in explaining changes in the U.S. distribution of wages from 1979 to 1988.