Using the Oaxaca-Blinder decomposition to quantitatively assess the gender pay gap

Abstract

"In this chapter we present the decomposition technique of Oaxaca (1973) and Blinder (1973), which is one of the most commonly used methods for analysing wage differences between men and women. It provides a comprehensive means to quantify the contribution of observed wage-determining characteristics and of unobserved characteristics to the gender pay gap. After an overview of the basic idea behind the Oaxaca-Blinder decomposition, we discuss its validity for empirical research, the major caveats that go along with its use and some subsequent extensions. This is illustrated with personal experience of using the decomposition for two research questions: first, for decomposing the gender pay gap for the countries of the European Union (EU), and, second, for single regions within Germany. We conclude with a discussion of the scope and limits of the Oaxaca-Blinder decomposition." (Text excerpt, IAB-Doku) ((en))

Cite article

Fuchs, M., Rossen, A., Weyh, A. & Wydra-Somaggio, G. (2019): Using the Oaxaca-Blinder decomposition to quantitatively assess the gender pay gap. In: D. Wheatley (Hrsg.) (2019): Handbook of research methods on the quality of working lives, Elgar p. 224-234.