Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282581 
Year of Publication: 
2023
Series/Report no.: 
IZA Discussion Papers No. 16454
Publisher: 
Institute of Labor Economics (IZA), Bonn
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.
Subjects: 
education
life satisfaction
employment status
compulsory schooling reforms
school openings
instrumental variable estimation
JEL: 
I26
I31
C26
Document Type: 
Working Paper

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