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What's the good of education on our overall quality of life?: a simultaneous equation model of education and life satisfaction for Australia

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

Abstract

Many economists and educators favour public support for education on the premise that education improves the overall quality of life of citizens. However, little is known about the different pathways through which education shapes people's satisfaction with life overall. One reason for this is because previous studies have traditionally analysed the effect of education on life satisfaction using single-equation models that ignore interrelationships between different theoretical explanatory variables. In order to advance our understanding of how education may be related to overall quality of life, the current study estimates a structural equation model using nationally representative data for Australia to obtain the direct and indirect associations between education and life satisfaction through five different adult outcomes: income, employment, marriage, children, and health. Although we find the estimated direct (or net) effect of education on life satisfaction to be negative and statistically significant in Australia, the total indirect effect is positive, sizeable and statistically significant for both men and women. This implies that misleading conclusions regarding the influence of education on life satisfaction might be obtained if only single-equation models were used in the analysis.

Suggested Citation

  • Powdthavee, Nattavudh & Lekfuangfu, Warn N. & Wooden, Mark, 2015. "What's the good of education on our overall quality of life?: a simultaneous equation model of education and life satisfaction for Australia," LSE Research Online Documents on Economics 61801, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:61801
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    1. What’s the good of education on our overall quality of life?: a simultaneous equation model of education and life satisfaction for Australia
      by maximorossi in NEP-LTV blog on 2017-03-22 23:20:54

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    More about this item

    Keywords

    Australia; indirect effect; education; structural equation model; life satisfaction; HILDA;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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