Relationship Among Education, Income, and Life Satisfaction

Relationship Among Education, Income, and Life Satisfaction

Elsa-Sofia Morote (Farmingdale State University of New York, USA)
DOI: 10.4018/978-1-5225-3616-1.ch006


This study examines the relationships among Education, Income, and Life Satisfaction. The study also seeks to learn whether Unemployment can be a mediator of these relationships. For this study, database collected by the Quality of Government Institute was used. The database contains 194 countries' records on the topic and its variables collected in 2012. Correlation to test relationship, and partial correlation to test the relationship among the variables while controlling for unemployment was used. It was found that income strongly relates to life satisfaction, and years of schooling relates weakly to life satisfaction. Years of schooling, however, strongly relates to GDP per capita. Contrary to previous studies, it was found that unemployment was not a mediator of the relationship among Education, Income, and Life Satisfaction but shows slight indication that it can be a mediator between higher education and life satisfaction. It was advised that governments put more effort into education as well as future research on enhancing the quality and efficacy of education.
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An important duty of nearly every Western government is improving-the wellbeing of its people, and education is considered a key element in increasing the efficacy of the production system to produce the wealth that supports the common weal. It is clear that in order to achieve economic development, it is necessary to have highly skilled people; many researchers (Duvall, 2001, Miller, 2013) and international organizations (King & World Bank, 2011) (21st Century Partnership, 2008) affirm that “education is crucial for economic and social progress in less developed countries” (Rondinelli & Montgomery, 1995). Also, most agree that the linkage between higher education and economic development is a two-way process. However, few researchers include employment and happiness in the equation.

Although some may disagree that the assurance of happiness for its citizens is a governmental responsibility, several governments in the world consider doing so their responsibility. For example, in 1933, Herbert Hoover, President of the United States, highlighted the importance of assuring happiness of the citizenry (Mitchell & USA, 1933) by connecting happiness with the economic situation of the country. Bhutan’s Fourth Dragon King Jigme Singye Wangchuck took that responsibility seriously creating the famous Gross National Happiness (GNH) as a measurement of the success of the Bhutanese economy in serving the wellbeing of Bhutan’s people and Buddhist culture, replacing the GDP (Gross Domestic Product) as the sole standard for judging Bhutan’s economy. This was codified in Bhutan’s legal code that included the maxim stating that, “…if the Government cannot create happiness (dekid) for its people, there is no purpose for the Government to exist”– Legal Code of Bhutan 1972 (O.E.C.D., Ura, Alkire, & Zangmo, 2011)

Throughout the past, the happiness and wellbeing of the individual has captured the attention of several researchers (Malik, & Singh, 2012; Nicolae, 2012). In the United States, one of the lead researchers is Diener of the University of Illinois offers the following comprehensive definition: “a person is said to have high [well-being or happiness] if she or he experiences Life Satisfaction and frequent joy, and only infrequently experiences unpleasant emotions such as sadness or anger. Contrariwise, a person is said to have low [well-being or happiness] if she or he is dissatisfied” (In Bok, 2010, p. 9). Diener prefers to measure Life Satisfaction, and his five survey questions show high reliability and have been tested several times (Diener, Emmons, Larsen, & Griffin, 1985; Pavot, Diener, Colvin, & Sandvik, 1991).

Happiness and economic development has been object of a research in several countries. For example, Knight and Gunatilaka (2012) found that in China current income has a positive and significant effect on happiness. On the contrary, the economist Easterlin (2013) concluded that average levels of happiness in the United States have risen very little if at all over the past 50 years despite substantial growth in per capita incomes, although Easterlin admitted that “rich people, as a whole, are happier than poor people.” In addition, after analyzing 17 developed countries, nine developing countries, 11 transition countries, Easterlin concluded that in the short term, happiness and economic growth are positively related.

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