Question

Based on a study of the nations of the world, a researcher finds that wealthier nations generally have a greater percentage of the population employed in the public sector than do less fortunate nations. He claims that this relationship is causal; i.e., the wealth of a nation leads to or causes growth in public sector employment. Evaluate this claim with respect to the criteria for assessing causality. Explain your arguments briefly and clearly.

Answer 1

There is a difference between the two terms correlation and causation. Correlation does not always imply the causation, but causation always implies the correlation. The correlation is only the statistical or numerical relationship between two variables even they are related or not, but the causation is the relationship between the two variables. Causation indicates that the result of one variable is the result of the other variable. For the given scenario, a researcher finds that wealthier nations generally have a greater percentage of the population employed in the public sector. There is a causal relationship exists between the percentage of the population employed in the public sector and wealth of the nation. If the nation is wealthier, then it causes an increment in the employees of the public sector. The wealth of the nation is the cause for a greater percentage of the population employed in the public sector. If the wealth of nation will increase, the number of employees in the public sector will increase. If the wealth of the nation will decrease, the number of employees in the public sector will also decrease. There is a positive relationship or association or you can say that there is a positive correlation exists between the two variable ‘wealth’ of a nation and percentage of ‘employees’ in the public sector.