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An Extension of the Blinder-Oaxaca Decomposition to Non-Linear Models

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  • Bauer, Thomas K.
  • Sinning, Mathias

Abstract

In this paper, a general Blinder-Oaxaca decomposition is derived that can also be applied to non-linear models, which allows the differences in a non-linear outcome variable between two groups to be decomposed into a part that is explained by differences in observed characteristics and a part attributable to differences in the estimated coeffcients. Departing from this general model, we show how it can be applied to different models with discrete and limited dependent variables.

Suggested Citation

  • Bauer, Thomas K. & Sinning, Mathias, 2006. "An Extension of the Blinder-Oaxaca Decomposition to Non-Linear Models," RWI Discussion Papers 49, RWI - Leibniz-Institut für Wirtschaftsforschung.
  • Handle: RePEc:zbw:rwidps:49
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    References listed on IDEAS

    as
    1. Thomas Bauer & Mathias Sinning, 2011. "The savings behavior of temporary and permanent migrants in Germany," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(2), pages 421-449, April.
    2. Bernd Fitzenberger & Karsten Kohn & Qingwei Wang, 2011. "The erosion of union membership in Germany: determinants, densities, decompositions," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(1), pages 141-165, January.
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    5. Thomas Bauer & Silja Göhlmann & Mathias Sinning, 2007. "Gender differences in smoking behavior," Health Economics, John Wiley & Sons, Ltd., vol. 16(9), pages 895-909, September.
    6. Ronald L. Oaxaca & Michael R. Ransom, 1999. "Identification in Detailed Wage Decompositions," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 154-157, February.
    7. José Mata & José A. F. Machado, 2005. "Counterfactual decomposition of changes in wage distributions using quantile regression," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(4), pages 445-465.
    8. Yun, Myeong-Su, 2004. "Decomposing differences in the first moment," Economics Letters, Elsevier, vol. 82(2), pages 275-280, February.
    9. Melly, Blaise, 2005. "Decomposition of differences in distribution using quantile regression," Labour Economics, Elsevier, vol. 12(4), pages 577-590, August.
    10. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Blinder-Oaxaca decomposition; non-linear models;

    JEL classification:

    • C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General

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