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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

  • 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)

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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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
Contact details of provider: Postal: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Victoria 3010 Australia
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Fax: +61 3 8344 2111
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