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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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  • Lekfuangfu, Warn N.
  • Powdthavee, Nattavudh
  • Wooden, Mark

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.

Suggested Citation

  • Lekfuangfu, Warn N. & Powdthavee, Nattavudh & Wooden, Mark, 2013. "The marginal income effect of education on happiness: estimating the direct and indirect effects of compulsory schooling on well-being in Australia," LSE Research Online Documents on Economics 51552, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:51552
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    Cited by:

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    2. Martin Huber & Michael Lechner & Giovanni Mellace, 2017. "Why Do Tougher Caseworkers Increase Employment? The Role of Program Assignment as a Causal Mechanism," The Review of Economics and Statistics, MIT Press, vol. 99(1), pages 180-183, March.
    3. Hamad, Rita & Elser, Holly & Tran, Duy C. & Rehkopf, David H. & Goodman, Steven N., 2018. "How and why studies disagree about the effects of education on health: A systematic review and meta-analysis of studies of compulsory schooling laws," Social Science & Medicine, Elsevier, vol. 212(C), pages 168-178.
    4. 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.
    5. Viviana Celli, 2019. "Causal Mediation Analysis in Economics: objectives, assumptions, models," Working Papers 12/19, Sapienza University of Rome, DISS.
    6. 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," LSE Research Online Documents on Economics 60278, London School of Economics and Political Science, LSE Library.
    7. Huber, Martin & Schelker, Mark & Strittmatter, Anthony, 2019. "Direct and Indirect Effects based on Changes-in- Changes," FSES Working Papers 508, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
    8. Matthew J. Easterbrook & Toon Kuppens & Antony S. R. Manstead, 2016. "The Education Effect: Higher Educational Qualifications are Robustly Associated with Beneficial Personal and Socio-political Outcomes," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 126(3), pages 1261-1298, April.
    9. Phumsith Mahasuweerachai & Siwarut Pangjai, 2018. "Does Piped Water Improve Happiness? A Case from Asian Rural Communities," Journal of Happiness Studies, Springer, vol. 19(5), pages 1329-1346, June.
    10. Matthew Manning & Christopher M. Fleming & Christopher L. Ambrey, 2016. "Life Satisfaction and Individual Willingness to Pay for Crime Reduction," Regional Studies, Taylor & Francis Journals, vol. 50(12), pages 2024-2039, December.
    11. 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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    More about this item

    JEL classification:

    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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