The Marginal Income Effect of Education on Happiness: Estimating the Direct and Indirect Effects of Compulsory Schooling on Well-Being in Australia

40 Pages Posted: 11 May 2013

See all articles by Nattavudh Powdthavee

Nattavudh Powdthavee

University of Warwick

Warn N. Lekfuangfu

Chulalongkorn University; CEP, London School of Economics

Mark Wooden

University of Melbourne - Melbourne Institute of Applied Economic and Social Research; IZA Institute of Labor Economics

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.

Keywords: schooling, indirect effect, well-being, mental health, windfall income, HILDA survey

JEL Classification: I20, I32, C36

Suggested Citation

Powdthavee, Nattavudh and Lekfuangfu, Warn N. and Wooden, Mark, The Marginal Income Effect of Education on Happiness: Estimating the Direct and Indirect Effects of Compulsory Schooling on Well-Being in Australia. IZA Discussion Paper No. 7365. Available at SSRN: https://ssrn.com/abstract=2263601

Nattavudh Powdthavee (Contact Author)

University of Warwick ( email )

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom
+44 (0)2476 528240 (Phone)

Warn N. Lekfuangfu

Chulalongkorn University ( email )

Bangkok 10330
Thailand

HOME PAGE: http://https://sites.google.com/site/warnlekfuangfu/

CEP, London School of Economics ( email )

Houghton Street
London WC2A 2AE
United Kingdom

HOME PAGE: http://https://sites.google.com/site/warnlekfuangfu/

Mark Wooden

University of Melbourne - Melbourne Institute of Applied Economic and Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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