Does Public Expenditure on Education Improve Well‐Being? International Evidence

Abstract

The aim of this article is to quantify the relationship between public expenditure on education and individual subjective well‐being, providing empirical evidence of the social return on this investment. We use microdata from the European Social Survey (ESS) merged with macroeconomic variables from official sources. Econometric estimations are carried out using multilevel models. Our results show a positive association between public expenditure on education and individual well‐being. However, this effect is not homogeneous across educational levels, as robust evidence of a positive contribution is only found for tertiary education. Furthermore, we explore whether this relationship is contingent on individuals' ideological preferences. Our findings indicate that individuals who espouse a conservative ideology exhibit a weaker effect compared to those with a progressive mindset. Nevertheless, the positive correlation between education expenditure and well‐being persists for the latter group. To assess the robustness of our results, we have replicated the calculations using a different survey, specifically the Eurobarometer, and conducted estimations with alternative methodologies, which confirm their consistency.