Direct and indirect effects of happiness on wage: A simultaneous equations approach

Madhu S. Mohanty and Aman Ullah

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2012, vol. 41, issue 2, 143-152

Abstract: Using data from the United Sates National Longitudinal Survey of Youth (NLSY79) and following a two-stage method, the current study estimates wage, schooling and happiness equations simultaneously and demonstrates that happiness affects the worker's wage not only directly, but also indirectly through its direct effect on years of schooling. The simultaneous relation between happiness and schooling demonstrated in this study further suggests that schooling also affects wage both directly and indirectly through happiness. The study supports the argument presented in several earlier studies that higher income does not necessarily guarantee higher levels of happiness.

Keywords: Wage; Schooling; Happiness; Two-stage method (search for similar items in EconPapers)
JEL-codes: J24 J31 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:41:y:2012:i:2:p:143-152

DOI: 10.1016/j.socec.2011.12.004

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