Using the Oaxaca-Blinder decomposition technique to analyze learning outcomes changes over time: An application to Indonesia's results in PISA mathematics

Abstract

The Oaxaca-Blinder technique was originally used\nin labor economics to decompose earnings gaps\nand to estimate the level of discrimination. It has\nbeen applied since in other social issues, including\neducation, where it can be used to assess how much of\na gap is due to differences in characteristics (explained\nvariation) and how much is due to policy or system\nchanges (unexplained variation). The authors apply\nthe decomposition technique in an effort to analyze\nthe increase in Indonesia’s score in PISA mathematics.\nBetween 2003 and 2006, Indonesia’s score increased by\n30 points, or 0.3 of a standard deviation. The test score\nincrease is assessed in relation to family, student, school\nand institutional characteristics. The gap over time is\ndecomposed into its constituent components based on\nthe estimation of cognitive achievement production\nfunctions. The decomposition results suggest that almost\nthe entire test score increase is explained by the returns to\ncharacteristics, mostly related to student age. However,\nthe authors find that the adequate supply of teachers also\nplays a role in test score changes.

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