Decompose the raw difference in average wages using the Oaxaca-Blinder decomposition.

Question

Suppose that a labor economist performs a statistical analysis on economywide worker wages using standard, measurable explanatory factors, such as job characteristics, years of schooling, and so forth. How much of the variation in worker wages can be accounted for by such measurable explanatory factors? Somewhat more than 60% Nearly 100% Somewhat less than 50% About 0% Which of the following factors are typically omitted from the quantitative analysis of wages but can help explain otherwise unaccounted-for disparities? Check all that apply. Chance Attractiveness Natural ability Effort Race O O O O

Answer 1

Question

Chapter 9, Problem 14P

To determine

Decompose the raw difference in average wages using the Oaxaca-Blinder decomposition.

Expert Solution & Answer

Trending nowThis is a popular solution!

See solution

Check out sample textbook solution

Students have asked these similar questions

Suppose that a labor economist performs a statistical analysis on economywide worker wages using standard, measurable explanatory factors, such as job characteristics, years of schooling, and so forth. How much of the variation in worker wages can be accounted for by such measurable explanatory factors? Somewhat more than 60% Nearly 100% Somewhat less than 50% About 0% Which of the following factors are typically omitted from the quantitative analysis of wages but can help explain otherwise unaccounted-for disparities? Check all that apply. Chance Attractiveness Natural ability Effort Race O O O O

Can regression be used to estimate the effect of gender on an individual’s earnings?

Question 5 $23 yusine) Suppose that two wage regressions are estimated for black and white workers: W₁=5.0+ 0.10S and Ww= 6.0+ 0.145 where S is the number of years of schooling. The average years of schooling for blacks and whites, respectively, is 12.2 and 13.6 years. a) Draw the respective wage profiles for black and white workers on the same graph. Indicate the raw wage differential for the average black and white worker. b) Calculate the Oaxaca decomposition. Indicate on your graph in (a), the portion of the wage differential attributable to skill differences between white and black workers and the portion due to labor market discrimination.