Notes to Pages 55–61- 0.08 = (0.03 + 0.05 − 0.01 + 0.07)/4 + 0.06/2.5. It could be turned
into a rate of return as follows. The monetary equivalent of 0.07 points
of life- satisfaction per year is a change in income of 0.07/0.2 or 33%.
This is a good annual return on the sacrifice of one year’s income in
order to obtain the extra education— plus of course the cost of tuition. - See also Nikolaev (2016).
- Suppose the individual’s income rises by 10%. Taxes could in-
crease by one- half of this, and the social value of an extra 5% of income
is 0.01 (i.e., 0.05 × 0.2). - 1 SD of qualification reduces the number of convictions by
age 30 by 0.064. Since the SD of years of education is 2.5, this means
that one extra year of education reduces the number of convictions by
0.026. But Home Office data show that crimes/arrests = 3.6 and BCS
data show that arrests/convictions = 1.5. So one extra year of education
reduces crimes by 0.14. As Chapter 7 shows, each crime reduces popu-
lation well- being by one point- year. - A lot is often claimed for the effects of educated parents on
their children. But, as we show, parents’ education mainly affects their
children’s academic performance; it appears to have little effect on the
children’s emotional health. - The ALSPAC cohort data are not yet able to provide evidence
on the subjects’ final highest qualification. - Only 2% of the sample were nonwhite.
- See online Table A3.1.
- See Barro and Lee (2015). On individuals, the so- called screen-
ing hypothesis argues that more educated people receive higher in-
comes because education is simply a signal of higher preceding ability;
but there is much evidence against this view (see, for example, Layard
and Psacharopoulos [1974] and the evidence at national level provided
by Barro and Lee [2015] and others).
Chapter 4. Work and Unemployment
- Say 1,600 hours a year in advanced countries out of 6,000 hours.
- Kahneman, Krueger, et al. (2004), Krueger, Kahneman, Schkade,
et al. (2009). - For two early demonstrations of this by economists see Clark
and Oswald (1994) and Winkelmann and Winkelmann (1998). See also
online Annex 4. - Thus to some extent the unemployment was “involuntary”
since in a frictionless economy they would have chosen to return at