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A Stata implementation of the Blinder-Oaxaca decomposition

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  • Ben Jann

    ()

Abstract

The counterfactual decomposition technique popularized by Blinder (1973) and Oaxaca (1973) 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. The present paper summarizes the technique and addresses a number of complications such as the identification of effects of categorical predictors in the detailed decomposition or the estimation of standard errors. A new Stata command called -oaxaca- is introduced and examples illustrating its usage are given.

Suggested Citation

  • Ben Jann, 2008. "A Stata implementation of the Blinder-Oaxaca decomposition," ETH Zurich Sociology Working Papers 5, ETH Zurich, Chair of Sociology, revised 14 May 2008.
  • Handle: RePEc:ets:wpaper:5
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    File URL: http://repec.ethz.ch/ets/papers/jann_oaxaca.pdf
    File Function: Revised version, 2008
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    References listed on IDEAS

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    1. John P. Haisken-DeNew & Christoph M. Schmidt, "undated". "Inter-Industry and Inter-Region Differentials: Mechanics and Interpretation," Working Papers 9504, SELAPO Center for Human Resources.
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    More about this item

    Keywords

    Stata; Blinder-Oaxaca decomposition; outcome differential; wage gap;

    JEL classification:

    • C49 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Other
    • C87 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Econometric Software
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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