A continuous income-based grade gap decomposition on university course grades

Shawn W. Ulrick, Kevin Mongeon and Michael P. Giannetto

Applied Economics, 2018, vol. 50, issue 31, 3388-3404

Abstract: The earnings premium for education, and higher education in particular, is well documented. This article examines the college achievement gap between students coming from positions of high and low socio-economic status. Other papers have also looked at this issue, often by employing, at least in part, an Oaxaca decomposition. Past papers artificially divided socio-economic status into binary groups of high and low, in order to employ the decomposition. Socio-economic status is innately a continuous variable. Therefore, we implement a continuous version of the Oaxaca decomposition. Higher socio-economic students are both slightly better prepared in terms of observable characteristics and have better returns to their characteristics than lower socio-economic students. Notable differences across results obtained from the binary and continuous decomposition methods are discussed.

Date: 2018
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DOI: 10.1080/00036846.2017.1420893

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