Question

Looking at a large sample of married households, an economist finds that husbands whose wives work earn less on average than husbands whose wives are not in the labor force. I then conclude that I should quit my job to boost my husband’s earnings. What is wrong with my economic analysis?

Answer 1

The reason that this economic analysis that you should quit your job to boost your husband’s earnings is wrong because here you take the cause as effect and effect as cause.

Here you assume the cause of high earning of husband is whether the wife is working or not but this is actually the effect not cause.

In simple terms, here the reason wife works is that their husbands income is not very high. While those wives whose husband's income is high, do not feel the need to work. It means here, the cause is the husband earning and the effect is wive work.

But you take the cause as effect and effect as cause. This is wrong with your economic analysis.