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dc.contributor.authorHeitmüller, Axelen_US
dc.description.abstractThough theoretically appealing and very popular amongst labour economists, the interpretation of the unexplained part of the Oaxaca (1973) decomposition as discrimination rather than an omitted variable problem in cross-section data has often been criticised. In this note it is shown that this problem extends also to panel data and moreover that in a fixed effects model including time invariant regressors omitted variables are a necessary and deliberate consequence. Monte Carlo simulation is used to show the extent of the bias. Special cases and practical implications are discussed.en_US
dc.publisherInstitute for the Study of Labor (IZA) Bonnen_US
dc.relation.ispartofseriesIZA Discussion Papers 1886en_US
dc.subject.keywordfixed effectsen_US
dc.subject.keywordMonte Carlo studyen_US
dc.titleA note on decompositions in fixed effects models in the presence of time-invariant characteristicsen_US
dc.typeWorking Paperen_US
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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