Primary Submission Category: Causal Inference and SUTVA/Consistencies Violations
Non-Existent Outcomes in Research on Inequality: A Causal Approach
Authors: Ian Lundberg, Soonhong Cho,
Presenting Author: Ian Lundberg*
When studying inequality, a focal outcome may not exist for some individuals. Those who are not employed have no hourly wage, for example. Scholars of wage inequality routinely drop the non-employed. But the same causal process that shapes wage inequality among the employed also shapes which people are employed at all. Researchers who drop those with non-existent outcomes inadvertently induce selection problems and obscure inequality. We show how to use principal stratification methods to study two quantities: (1) the average effect on whether an outcome exists, and (2) the average effect on that outcome among the latent set of people who would have an outcome under either treatment condition. Our technical contribution is to carry out principal stratification within a parametric regression analysis that adjusts for measured confounders. Our applied contribution is to reveal how standard practices in sociology and economics obscure inequality. We illustrate by showing how past work has understated the causal effect of motherhood on the hourly wages of women who would be employed with or without children.