A General Approach to Effect Decomposition

Feng Hou

Social Science Quarterly, 2014, vol. 95, issue 3, 894-904

Abstract: type="main">

This article illustrates the commonality among the Oaxaca decomposition, mediation analysis, and path analysis used in various social science fields to decompose the effect of a predictor on the outcome into constituent components.

A general approach is proposed that extends the Oaxaca decomposition to continuous predictors. It also removes one critical restriction on covariates in mediation analysis.

An empirical example shows that the effect of fathers’ education on children's years of schooling primarily works through children's early skill development and educational aspirations.

The proposed approach is easy to implement since it requires only two pieces of information: simple correlations and standardized regression coefficients.

Date: 2014
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