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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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Author Info

  • Nattavudh Powdthavee

    (Centre for Economic Performance, London School of Economics: and Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Warn N. Lekfuangfu

    (University College London)

  • Mark Wooden

    ()
    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

Many economists and educators favour public support for education on the premise that education imporves the overall well-being of citizens. However, little is known about the casual pathwasy 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 Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number wp2013n16.

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Length: 40 pages
Date of creation: Apr 2013
Date of revision:
Handle: RePEc:iae:iaewps:wp2013n16

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Postal: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Victoria 3010 Australia
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Keywords: Schooling; indirect effect; well-being; mental health; windfall income; HILDA survey;

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Cited by:
  1. 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.
  2. 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.

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