# st: RE: Heckmanregression and Oaxaca dcomposition

 From "Jann, Ben" <[email protected]> To <[email protected]> Subject st: RE: Heckmanregression and Oaxaca dcomposition Date Wed, 4 Feb 2004 10:21:35 +0100

```GG wrote:
> I am trying to do a oaxaca decomposition after a
> Heckment selection regression. When using the
> DECOMPOSE or DECOMP codes, I received an error
> message when I want to do the decomposition.

The problem is that the two programs do not explicitly support
multi-equation models. However, you may apply the decomposition to
heckman models if the regression equation is estimated seperately:

1. Use the two-step method to estimate the model and save the inverse
mills-ratio (lambda).
2. Use OLS to reestimate the regression equation including lambda and
save the model.

Example: regression of wages (w) on education (e) and experience (x and
x2) by sex (1=female, 2=male); standard model for male, heckman model
for female

. heckman w e x x2  if sex==1, select(...) twostep mills(lambda)
. regress w e x x2 lambda if sex==1
. decompose, save(low)
. regress w e x x2 if sex==2
. decompose, save(high)
. decompose, lambda(lbda)

I am planing to update -decompose- to Stata 8 and add support for
multi-equation models (and fix a couple of bugs [and probably add some
new ones...]). It might take a while, however.

Ben

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```