English, Article, Journal or magazine article edition: Unexplained Gaps and Oaxaca-Blinder Decompositions Todd E. Elder; John H. Goddeeris; Steven J. Haider

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Bookmark: http://trove.nla.gov.au/version/48425
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Unexplained Gaps and Oaxaca-Blinder Decompositions
Author
  • Todd E. Elder
  • John H. Goddeeris
  • Steven J. Haider
Physical Description
  • preprint
Notes
  • We analyze four methods to measure unexplained gaps in mean outcomes: three decompositions based on the seminal work of Oaxaca (1973) and Blinder (1973) and an approach involving a seemingly naïve regression that includes a group indicator variable. Our analysis yields two principal findings. We first show that a commonlyused pooling decomposition systematically overstates the contribution of observable characteristics to mean outcome differences, therefore understating unexplained differences. We also show that the coefficient on a group indicator variable from an OLS regression is an attractive approach for obtaining a single measure of the unexplained gap. We then provide three empirical examples that explore the practical importance of our analytic results.
  • decompositions, discrimination
  • RePEc:auu:dpaper:600
Language
  • English
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