The link between higher national income and higher national life satisfaction is critical to economic policymaking. This column presents new evidence that the connection is hump-shaped. There is a clear, positive relation in the poorer nations and regions, but it flattens out at around $30,000–$35,000, and then turns negative.
Eugenio Proto, Aldo Rustichini, Saturday, January 11, 2014
Markus Brückner, Mark Gradstein, Sunday, February 24, 2013
Whereas existing literature has documented strong correlations between national incomes and measures of schooling attainment, causality has been hard to pin down. Much of empirical work had tended to interpret these correlations as implying an effect of human capital on national income, but recent calibrated models have argued that most of the link works, in fact, the other way around. This paper takes a close look as to whether income growth causes schooling from an empirical perspective.