Sociology 441: Stratification

Time trends as evidence for testing causal theories

Time trends will be one of our principal ways to evaluate macro-level causal hypotheses. If a higher minimum wage causes lower inequality, then years in which the minimum wage was high should be years in which inequality is low. And years in which the minimum wage was low should be years in which inequality is high. We will use similar evidence to evaluate causal theories explaining inequality regarding

• the minimum wage,
• de-industrialization,
• immigration,
• union membership,
• cyclical recessions, and
• globalization.

The first step in evaluating the evidence is a simple comparison of the two time trends. Do the trends look similar? Or if we specify a negative relationship (e.g., as the minimum wage falls, inequality rises) are the two trends mirror images of each other? There are more sophisticated tests we could do if we knew some statistics, but for now just inspecting the trends gives us a good first test.

One great advantage of this test is that you don't need to Ph.D. to do it. These time series are widely available. Once you get used to this type of test, it will be easy. We will do many, many of these during the semester.