The easiest way to estimate the Oaxaca-Blinder decomposition

Bonnal, Liliane, Boumahdi, Rachid and Favard, Pascal (2013) The easiest way to estimate the Oaxaca-Blinder decomposition. Applied Economic letters, 20 (1). pp. 96-101.

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Official URL: http://tse-fr.eu/pub/27283

Abstract

This article studies the relation between the Oaxaca–Blinder decomposition and the estimated coefficient of a dummy variable for a linear regression. We calculate the unexplained part of the decomposition from the estimated coefficient of the dummy variable. More precisely, if the exogenous variables are uncorrelated to the dummy variable, the estimated coefficient and its variance give directly the value and the variance of the unexplained part of the decomposition. If the independent variables are correlated a simple relation is obtained. Moreover, we show that the significance of the unexplained part can be deduced from the significance of the estimated coefficient of the dummy variable.

Item Type: Article
Language: English
Date: 2013
Refereed: Yes
Uncontrolled Keywords: Oaxaca decomposition, dummy variable, linear regression, discrimination
JEL codes: C13 - Estimation
J15 - Economics of Minorities and Races; Non-labor Discrimination
J16 - Economics of Gender; Non-labor Discrimination
J71 - Discrimination
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 09 Jul 2014 17:37
Last Modified: 07 Mar 2018 13:22
OAI ID: oai:tse-fr.eu:27283
URI: http://publications.ut-capitole.fr/id/eprint/15658

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