The Blinder–Oaxaca decomposition for linear regression models
The counterfactual decomposition technique popularized by Blinder (1973, Journal of Human Resources, 436–455) and Oaxaca (1973, International Economic Review, 693–709) is widely used to study mean outcome diﬀerences between groups. For example, the technique is often used to analyze wage gaps by sex or race. This article summarizes the technique and addresses several complications, such as the identiﬁcation of eﬀects of categorical predictors in the detailed decomposition or the estimation of standard errors. A new command called oaxaca is introduced, and examples illustrating its usage are given. Copyright 2008 by StataCorp LP.
Volume (Year): 8 (2008)
Issue (Month): 4 (December)
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