EducationHow Education Affects Life- Satisfaction
In the British Cohort Study, education is well correlated with
life- satisfaction, provided no other variables are included.
As Table 3.1 shows, one standard deviation more of educa-
tion is associated with 0.19 extra points of life- satisfaction.
However, this overestimates the direct impact of educa-
tion per se on life- satisfaction, for two reasons. First, some
of those 0.19 points are an indirect effect of education via
other things (like income) that education affects and that
then affect life- satisfaction. These are “mediating” variables
and reflect a genuine effect of education but one that is in-
direct. Second, there are other variables, like father’s unem-
ployment, that are correlated with education and also affect
life- satisfaction. These are “confounding” variables.
To obtain the direct effect of education on life- satisfaction
we have to hold all these other variables constant. When this
is done, the effect of one standard deviation of education falls
drastically to 0.04 points of happiness. This may seem small,
but one must remember that it lasts over a very long period.
On top of this there is the indirect effect via things like
income. How big is this indirect effect of education on hap-
piness? To answer this requires a “decomposition analysis.”
This is a very useful technique that we also use extensively
Table 3.1. How life- satisfaction (0– 10) is affected by qualifications
(British Cohort Study)Effect of 1 SD of qualificationsHolding nothing else constant 0.19 (.02)
Holding everything constant 0.04 (.02)