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The "unexplained" part of the rise in unemployment is still present.20.
We find that the unexplained part of the observed gender wage gap has also decreased over these years.
Firstly, we tested econometrically whether the selected instruments are uncorrelated with the unexplained part of the earning equation.
Precisely, we find that the unexplained part of the gap (the coefficient effect) is overestimated and the explained part of the gap (the characteristic effect) is underestimated.
Specifically, the Blinder-Oaxaca decomposition overestimates the unexplained part of the gap (the coefficient effect) and underestimates the explained part of the gap (the characteristic effect).
What is striking, however, is that the unexplained part of the gender wage gap is much larger than the observed gender wage gap in each year.
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The next question posed, then, is whether the unexplained part of these regressions still differs among Greece, SP, and the remaining OECD countries (i.e., the ROECD group).
While they noted there were some unexplained parts of the plot, they felt that it was generally believable and said that "Vicki actually steals the show here".
This is why there is a contribution of the constant term to the unexplained part whereas the contribution of the constant to the explained part is zero.
For the unexplained portion of the gap, we may not differentiate the part attributed to the group membership (true "unexplained" captured by the difference in intercepts) from the part attributed to differences in the coefficient of the omitted group [5].
In the latter case, geostatistics are used to model the unexplained or residual part of the variability predicted by the process-based models.
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Justyna Jupowicz-Kozak
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