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st: any shortcut for oaxaca decomposition

From   "Ada Ma" <>
Subject   st: any shortcut for oaxaca decomposition
Date   Tue, 25 Nov 2003 12:19:57 +0000


I am doing some oaxaca decompositions and I'm looking for some shortcuts, thus I ran the two following estimations:

[1] separate estimations for male and female: wage = alpha + beta1*gamma + beta2*zeta

[2] one estimation, but with interactive dummies (female = 1 for women)
wage = alpha + beta1*gamma + beta2*zeta + beta3*female + beta4*female*gamma + beta5*female*zeta

Now my question is why is it that the estimated beta1 in [2] differ from that of beta1 in the male estimation in [1]? And why is it that the summation of beta1 and beta4 in estimation [2] would equal to beta1 for females in estimation [1]?

I know I'm making different assumptions regarding the error terms in estimations [1] and [2], but what elses are driving the differences?

Many thanks in advance.

Ada Ma

Dept of Econ
Univ of Aberdeen

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