Standard Errors for the Blinder-Oaxaca Decomposition

Jann, Ben (8 April 2005). Standard Errors for the Blinder-Oaxaca Decomposition (Unpublished). In: 3rd German Stata Users Group Meeting. Berlin, Germany. 08.04.2005.

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The decomposition technique introduced by Blinder (1973) and Oaxaca (1973) is widely used to study outcome differences between groups. For example, the technique is commonly applied to the analysis of the gender wage gap. However, despite the procedure's frequent use, very little attention has been paid to the issue of estimating the sampling variances of the decomposition components. We therefore suggest an approach that introduces consistent variance estimators for several variants of the decomposition. The accuracy of the new estimators under ideal conditions is illustrated with the results of a Monte Carlo simulation. As a second check, the estimators are compared to bootstrap results obtained using real data. In contrast to previously proposed statistics, the new method takes into account the extra variation imposed by stochastic regressors.

Item Type:

Conference or Workshop Item (Speech)


03 Faculty of Business, Economics and Social Sciences > Social Sciences > Institute of Sociology

UniBE Contributor:

Jann, Ben


300 Social sciences, sociology & anthropology




Ben Jann

Date Deposited:

28 Jun 2016 15:55

Last Modified:

28 Jun 2016 15:55




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