Empirical likelihood inference for Oaxaca–Blinder decomposition

Taisuke Otsu and Shiori Tanaka

Economics Letters, 2022, vol. 219, issue C

Abstract: This paper proposes an empirical likelihood inference method for the Oaxaca–Blinder decompositions. In contrast to the conventional Wald statistic using the delta method, our approach circumvents the linearization errors and estimation of the variance terms. Furthermore, the shape of the resulting empirical likelihood confidence set is determined flexibly by data. Simulation results illustrate usefulness of the proposed inference method.

Keywords: Oaxaca–Blinder decomposition; Empirical likelihood; Two-sample test (search for similar items in EconPapers)
JEL-codes: C14 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:219:y:2022:i:c:s0165176522002981

DOI: 10.1016/j.econlet.2022.110812

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