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

Abstract

This paper develops a general Blinder-axaca decomposition that allows the differences in an outcome variable between two groups to be decomposed into (i) a part that is explained by differences in observed characteristics and (ii) a part attributable to differences in the estimated coefficients also for nonlinear regression models. Based on this general model, we show how it can be applied to different models with discrete and limited dependent variables. Show more