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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

  • Powdthavee, Nattavudh

    ()
    (London School of Economics)

  • Lekfuangfu, Warn N.

    ()
    (University College London)

  • Wooden, Mark

    ()
    (Melbourne Institute of Applied Economic and Social Research)

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 Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7365.

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Length: 40 pages
Date of creation: Apr 2013
Date of revision:
Handle: RePEc:iza:izadps:dp7365

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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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