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The Blinder–Oaxaca decomposition for linear regression models

Author

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  • Ben Jann

    (ETH Zürich)

Abstract

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.

Suggested Citation

  • Ben Jann, 2008. "The Blinder–Oaxaca decomposition for linear regression models," Stata Journal, StataCorp LP, vol. 8(4), pages 453-479, December.
  • Handle: RePEc:tsj:stataj:v:8:y:2008:i:4:p:453-479
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    References listed on IDEAS

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