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CEP discussion paper

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


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.


Warn N. Lekfuangfu, Nattavudh Powdthavee and Mark Wooden

10 May 2013     Paper Number CEPDP1214

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This CEP discussion paper is published under the centre's Community Wellbeing programme.