More Education Does Make You Happier – Unless You Are Unemployed

Alexander Bertermann (), Daniel A. Kamhöfer () and Hannah Schildberg-Hörisch ()
Additional contact information
Alexander Bertermann: LMU Munich
Daniel A. Kamhöfer: Heinrich Heine University Düsseldorf
Hannah Schildberg-Hörisch: Max Planck Institute for Research on Collective Goods

No 16454, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper investigates the causal effect of education on life satisfaction, exploring effect heterogeneity along employment status. We use exogenous variation in compulsory schooling requirements and the build-up of new, academically more demanding schools, shifting educational attainment along the entire distribution of schooling. Leveraging plant closures and longitudinal information, we also address the endogeneity of employment status. We find a positive effect of education on life satisfaction for employed individuals, but a negative one for those without a job. We propose an aspiration-augmented utility function as a unifying explanation for the asymmetric effect of education on life satisfaction.

Keywords: education; life satisfaction; employment status; compulsory schooling reforms; school openings; instrumental variable estimation (search for similar items in EconPapers)
JEL-codes: C26 I26 I31 (search for similar items in EconPapers)
Pages: 61 pages
Date: 2023-09
New Economics Papers: this item is included in nep-edu, nep-eur, nep-hap and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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