Discussion paper

DP5309 Blinder-Oaxaca Decomposition for Tobit Models

In this paper, a decomposition method for Tobit-models is derived, which allows the differences in a censored outcome variable between two groups to be decomposed into a part that is explained by differences in observed characteristics and a part attributable to differences in the estimated coefficients. The method is applied to a decomposition of the gender wage gap using German data


Bauer, T and M Sinning (2005), ‘DP5309 Blinder-Oaxaca Decomposition for Tobit Models‘, CEPR Discussion Paper No. 5309. CEPR Press, Paris & London. https://cepr.org/publications/dp5309