Greetings,
I am writing my thesis on the race pay gap and would like to employ the increasingly popular approach, the Blinder-Oaxaca method. Never worked with this method and am not good at math or statistics so I need help with a few things:
In my standard OLS regression, I include variables such as board size, board independence, firm size, firm performance, year and industry controls, etc. in order to control for board and firm characteristics that are known to affect CEO compensation. Now, in a Blinder-Oaxaca decomposition, would it be appropriate to include these controls given that the method is about making assumptions about average group ability, and these variables are not part of individual characteristics? I assume variables such as education, age, age squared, tenure, etc. would be more appropriate?
How do you interpret the results of the decomposition? I have sections and columns called endowments, coefficients and interaction. I have read about the Blinder-Oaxaca approach in multiple papers, but some beginners' guide to how to interpret it in Stata would be very helpful.
Any help is highly appreciated.
Kind regards,
Vlad
I am writing my thesis on the race pay gap and would like to employ the increasingly popular approach, the Blinder-Oaxaca method. Never worked with this method and am not good at math or statistics so I need help with a few things:
In my standard OLS regression, I include variables such as board size, board independence, firm size, firm performance, year and industry controls, etc. in order to control for board and firm characteristics that are known to affect CEO compensation. Now, in a Blinder-Oaxaca decomposition, would it be appropriate to include these controls given that the method is about making assumptions about average group ability, and these variables are not part of individual characteristics? I assume variables such as education, age, age squared, tenure, etc. would be more appropriate?
How do you interpret the results of the decomposition? I have sections and columns called endowments, coefficients and interaction. I have read about the Blinder-Oaxaca approach in multiple papers, but some beginners' guide to how to interpret it in Stata would be very helpful.
Any help is highly appreciated.
Kind regards,
Vlad
