Journal
STATA JOURNAL
Volume 8, Issue 4, Pages 453-479Publisher
STATA PRESS
DOI: 10.1177/1536867X0800800401
Keywords
st0151; oaxaca; Blinder-Oaxaca decomposition; outcome differential; wage gap
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The counterfactual decomposition technique popularized by Blinder (1973, Journal of Human Resources, 436-455) and Oaxaca (1973, International Economic Review, 693-709) 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. This article summarizes the technique and addresses several complications, such as the identification of effects of categorical predictors in the detailed decomposition or the estimation of standard errors. A new command called oaxaca is introduced, and examples illustrating its usage are given.
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