["Asia Pacific Viewpoint, EarlyView. ", "\nABSTRACT\nThis study examines the effectiveness of human capital as a driver of sustainable urban well‐being across 21 jurisdictions in Taiwan. Using a four‐stage parallel dynamic slacks‐based measure data envelopment analysis framework, we examine the transmission of educational inputs through economic, social, and environmental sustainability dimensions. The analysis identifies a critical governance challenge: although substantial institutional investment has been made in education, the education stage is the primary structural constraint, exhibiting a limited capacity to translate into improvements in urban happiness. We determine that this ‘education‐to‐economy’ friction is associated with structural mismatch, in which a persistently low fertility rate and credential inflation may weaken the alignment between human capital formation and regional industrial requirements. Total factor efficiency trajectories further reveal substantial spatial disparities, with southern and peripheral regions exhibiting a ‘high‐input, low‐absorption’ pattern. These results suggest that Taiwan's pursuit of urban happiness is constrained not by fiscal limitations but by challenges in aligning educational outputs with localised industrial upgrading and energy requirements. The present study offers a localised perspective on the global challenge of aligning human capital investment with the demands of a postindustrial and demographically shrinking society.\n"]