Assessing the effect of education on subjective well-being in Portugal: a study of mediating effects

Abstract

Research on happiness has shown that individuals derive utility from material as well as from non-material factors, from which some useful policy implications have been derived. Since education has not received the attention we believe it deserves within this literature, we aim at contributing to fill in this gap by assessing the effects of education on subjective well-being, thus raising awareness for the importance of investing in education. Accordingly, in this study we conduct an analysis of the mechanisms that transmit the effect of education into subjective well-being, focusing on Portugal, to take into account country specificities, and using data from the European Social Survey. In order to test such mechanisms, we add to a baseline regression, which includes the education level, a large set of potential mediating variables to test whether education affects SWB through the following channels: 1. Higher lifetime earnings; 2. Higher professional status; 3. Less risk of unemployment; 4. Higher social capital, and 5. Better health. The analysis shows that most of the considered variables contribute to carry the effects of education into subjective well-being. This is evidenced by a reduction of the coefficients of the education variables following the introduction of each mediator in the regression, thus confirming the hypothesized channels of transmission. Moreover, we find that education does not exert a direct effect on well-being, that secondary education provides a wider range of benefits than higher education, and that the human capital theory is not enough to account for all the mechanisms transmitting the effect of education into subjective well- -being in Portugal.