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The Marginal Income Effect of Education on Happiness: Estimating the Direct and Indirect Effects of Compulsory Schooling on Well-Being in Australia

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  • Warn N. Lekfuangfu
  • Nattavudh Powdthavee
  • Mark Wooden

Abstract

Many economists and educators favour public support for education on the premise that education improves the overall well-being of citizens. However, little is known about the causal pathways through which education shapes people's subjective well-being (SWB). This paper explores the direct and indirect well-being effects of extra schooling induced through compulsory schooling laws in Australia. We find the net effect of schooling on later SWB to be positive, though this effect is larger and statistically more robust for men than for women. We then show that the compulsory schooling effect on male's SWB is indirect and is mediated through income.

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Bibliographic Info

Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp1214.

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Date of creation: May 2013
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Handle: RePEc:cep:cepdps:dp1214

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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

Related research

Keywords: Schooling; indirect effect; well-being; mental health; windfall income; HILDA Survey;

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References

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Cited by:
  1. Powdthavee, Nattavudh & Wooden, Mark, 2014. "What Can Life Satisfaction Data Tell Us About Discrimination Against Sexual Minorities? A Structural Equation Model for Australia and the United Kingdom," IZA Discussion Papers 8127, Institute for the Study of Labor (IZA).
  2. Beja Jr., Edsel, 2013. "Does economic prosperity bring about a happier society? Empirical remarks on the Easterlin Paradox debate," MPRA Paper 49446, University Library of Munich, Germany.
  3. Huber, Martin & Mellace, Giovanni & Lechner, Michael, 2014. "Why do tougher caseworkers increase employment? The role of programme assignment as a causal mechanism," Economics Working Paper Series 1414, University of St. Gallen, School of Economics and Political Science.
  4. Beja Jr., Edsel, 2013. "Does economic prosperity bring about a happier society? Empirical remarks on the Easterlin Paradox debate sans Happiness Adaptation," MPRA Paper 50633, University Library of Munich, Germany.
  5. Frölich, Markus & Huber, Martin, 2014. "Direct and Indirect Treatment Effects: Causal Chains and Mediation Analysis with Instrumental Variables," IZA Discussion Papers 8280, Institute for the Study of Labor (IZA).

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