What Oaxaca-Blinder (OB) adds to the analysis
Oaxaca-Blinder decomposition is an accounting method. It starts with the observed average pay gap and asks how much of that gap is associated with measured differences between women and men.
It is especially useful when the question changes from "does a residual gap remain?" to "which measured factors appear to contribute to the gap?"
More detail than OLS
OLS estimates the residual gender coefficient. OB also shows which measured factors contribute to the total gap.
Better action targeting
A distributional gap points to hiring, progression, grading, or access to higher-paid work. A residual gap points to closer pay-setting review.
Sharper questions
Instead of asking only whether a gap remains, OB asks which characteristics are associated with the gap and how much remains unexplained.
How Oaxaca-Blinder works
OLS usually estimates one combined model for women and men together. Oaxaca-Blinder estimates separate group models and compares them.