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Blinder-Oaxaca wage decomposition Shown in Exhibits 2A and 2B are sample means a

ID: 3058597 • Letter: B

Question

Blinder-Oaxaca wage decomposition Shown in Exhibits 2A and 2B are sample means and log wage equation estimates for white and black men, respectively. Included are seven variables: schooling, experience, married, part-time, union, large metro, & South. hat is the unadjusted logarithn means)? [For question 4, just use log differentials. Do not convert to percentage differentials.] Using a "Blinder-Oaxaca" decomposition, break-up this total wage gap into "explained" and unexplained" portions, using the white male coefficients as the "nondiscriminatory" betas. How much of the total wage gap is explained by differences in measured characteristics? Show the contribution that each of the seven explanatory variables provides to the explained portion of the wage gap. Which characteristics are most important? How much of the wage gap is unexplained by differences in characteristics?

Explanation / Answer

Blinder-Oaxaca wage decomposition Shown in Exhibits 2A and 2B are sample means and log wage equation estimates for white and black men, respectively. Included are seven variables: schooling, experience, married, part-time, union, large metro, & South. hat is the unadjusted logarithn means)? [For question 4, just use log differentials. Do not convert to percentage differentials.] Using a "Blinder-Oaxaca" decomposition, break-up this total wage gap into "explained" and unexplained" portions, using the white male coefficients as the "nondiscriminatory" betas. How much of the total wage gap is explained by differences in measured characteristics? Show the contribution that each of the seven explanatory variables provides to the explained portion of the wage gap. Which characteristics are most important? How much of the wage gap is unexplained by differences in characteristics?
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