Blinder–Oaxaca decomposition

Blinder-Oaxaca decomposition is a way of looking at why certain groups of people may have different outcomes. It compares the difference between what the average outcome would have been for a group of people, if all of the people had the same characteristics, and the actual outcome for that group. For example, we can use the Blinder-Oaxaca decomposition to look at why men and women have different job salaries. The differences in payments could be due to differences between the characteristics of men and women (like education, training, experience, etc.) or to discrimination. The Blinder-Oaxaca decomposition can help us to find out what is causing the difference in job salaries.