A Note on Variance Estimation for the Oaxaca Estimator of Average Treatment Effects

We derive the limiting distribution of the Oaxaca estimator of average treatment effects studied by Kline (2011). A consistent estimator of the asymptotic variance is proposed that makes use of standard regression routines. It is shown that ignoring uncertainty in group means will tend to lead to an overstatement of the asymptotic standard errors. Monte Carlo experiments examine the finite sample performance of competing approaches to inference.

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Year of publication:	2014-01
Authors:	Kline, Patrick M.
Institutions:	National Bureau of Economic Research (NBER)

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Extent:	application/pdf
Series:	NBER Working Papers.
Type of publication:	Book / Working Paper
Notes:	LS TWP published as Kline, Patrick, 2014. "A note on variance estimation for the Oaxaca estimator of average treatment effects," Economics Letters, Elsevier, vol. 122(3), pages 428-431. The price is Paper copy available by mail Number 19784
Classification:	C01 - Econometrics ; J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc ; J7 - Discrimination
Source:	RePEc - Research Papers in Economics

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