Andrew Oswald: Why learning will make you happier

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The Independent Online

Polished shoes thudding. New high heels wobbling. Sore palms. Flashes of turquoise, red and purple. Flowing black processions of hoods.

Polished shoes thudding. New high heels wobbling. Sore palms. Flashes of turquoise, red and purple. Flowing black processions of hoods. Nerves. Whoops. Applause. Grey hair in the audience and dark hair on the catwalk... Graduation day is meant to be a spectacle, but, for parents with creased cheque books, it also is a day of catharsis and reflection.

University students are graduating across the United Kingdom. As I sat through our ceremony last week, I was contemplating a research paper on education that had arrived on my computer screen just that morning. Written by Philip Oreopoulos, a young economist at the University of Toronto, it is one of the most interesting studies on education I have ever read. You can find it on the internet.

Using data on more than 10 million people from many nations, the paper is riveting reading. It studies how one extra year of education affects students. What did Oreopoulos conclude? One extra year affects us a lot. And almost all the effect is positive.Of course, it is not a surprise to learn that education might be helpful to people. But what the study does is to use a clever method to work out the answers.

Here is the problem. Think of the amount spent on education in an advanced western nation. In an ideal world, we would like to calculate the rate of return to this investment. But how would that be done? You can certainly look at the correlation between the number of years of education a person has and how his or her life pans out. We know that link is a positive one. People who take many years of education tend to come out richer, for instance. But figuring out true causality here is tricky.

It would be great if we could run an enormous experiment. In principle, we could send Gordon Brown, the chancellor, onto the Today programme on Radio 4 one morning. "We are going to take all the babies born in a week in the UK," he would explain to John Humphreys, "and randomly assign them different levels of education. Some will be sent to university; others will leave school at the age of 14; then we will examine the subjects for the rest of their lives, measuring relative career and emotional success along the way."

Now wouldn't that be great science? Yet it is hard to see it happening. While the scientific benefits would be enormous, I doubt anyone would call this study ethical. So we need to figure out something akin to this experiment. There is such a thing.

Professor Oreopoulos exploits the fact that many Western governments have, through the years, changed their compulsory school-leaving age. In our country, for example, in 1947 the school-leaving age was increased from 14 to 15. Before that, the majority of Britons, amazingly from today's perspective, left education at the young age of 14. By contrast Quebec, in Canada, made the same change in its school-leaving age in the early 1960s. California had done the same in the 1920s, and so on. This variation is enormously useful to the statistical investigator.

Because we can now trace out and observe the lives of millions of individual adults in random-sample surveys, we can work backwards, thanks to the careful research of Oreopoulos and others, to what compulsory education did to those who left school so young. The study found that one extra year of education increases the average person's real income by an enormous amount. The best estimate is that the increase in earnings is roughly 10 per cent during each year of life.

A year of extra education also improves the body. It lowers the probability of poor health, on Oreopoulos's measure, by about four per cent. Additionally, extra compulsory education lengthens lives by quite a few years, the study author found.

Reported levels of happiness and life satisfaction are also raised by a further year of compulsory education. And the measured effect is large. Moreover, the reason happiness improves is not merely because of the cash in the bank that the education produces. The majority of improvement in psychological well-being from an extra year of compulsory education is non-pecuniary. It probably stems from the way education gives people confidence and flexibility of mind. It's important research. I'm glad Mr Oreopoulos stayed on at college to do it.

The writer is a professor of economics at the University of Warwick