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

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.

On the promotion of human flourishing

“…Some form of education is of course a near-universal phenomenon, but the extent varies considerably across people and populations. There is reasonably good evidence that higher levels of education are longitudinally associated with higher levels of happiness and life satisfaction (79)(80)(81). Although cross-sectional analyses that control for many covariates at once sometimes suggest no association, or even a negative association (80), such analyses typically control for income, employment, and marital status, which may be the primary pathways.…”

“…There is reasonably good evidence that higher levels of education are longitudinally associated with higher levels of happiness and life satisfaction (79)(80)(81). Although cross-sectional analyses that control for many covariates at once sometimes suggest no association, or even a negative association (80), such analyses typically control for income, employment, and marital status, which may be the primary pathways. Longitudinal analyses that take this temporal ordering into account suggest an effect of education on higher happiness and life satisfaction through these pathways (79,80).…”

“…Although cross-sectional analyses that control for many covariates at once sometimes suggest no association, or even a negative association (80), such analyses typically control for income, employment, and marital status, which may be the primary pathways. Longitudinal analyses that take this temporal ordering into account suggest an effect of education on higher happiness and life satisfaction through these pathways (79,80). Education is a strong cross-sectional predictor of health (82,83), but the extent to which this is causal is debated.…”

“…Higher levels of education are associated with subsequently higher levels of club membership, participation, and social interaction (91). Concerning marriage, there is some evidence that education may delay the timing of first marriage (92,93) but increases the overall likelihood of marriage (80,94,95), and decreases the likelihood of subsequent divorce (96). Education can of course strongly affect subsequent income (97)(98)(99).…”

Does Higher Education Increase Hedonic and Eudaimonic Happiness?

“…It is also possible that less happy people are more likley to pursue higher education, which drives the results in many correlational studies (Veenhoven, 2010). Another possible story is that most studies estimate reduced form happiness regressions that often control for variables such as income, health, and marital status and thus close these channels through which education may contribute positively to higher levels of SWB (Powdthavee et al, 2015). A more recent explanation suggests that people are willing to trade off some of their overall happiness for an upward trajectory in life (Nikolaev and Rusakov, 2015).…”