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

Nattavudh Powdthavee, Warn Nuarpear Lekfuangfu () and Mark Wooden

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2015, vol. 54, issue C, 10-21

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.

Keywords: Australia; Indirect effect; Education; Structural equation model; Life satisfaction; HILDA (search for similar items in EconPapers)
JEL-codes: C36 I20 I32 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (68)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:54:y:2015:i:c:p:10-21

DOI: 10.1016/j.socec.2014.11.002

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