Abstract
This chapter aims at identifying the main determinants of earnings and at estimating the private returns to education in Tunisia. The private rate of return to schooling is relatively low by international standards, especially for basic education. It is argued that in addition to the limited capacity of the economy to create high-productivity jobs, institutional factors may explain the low and heterogeneous returns to education in Tunisia. The returns to schooling are found to increase with the level of education. Regional disparities in earnings and returns to higher education may be explained by the lack of economic opportunities and low exposure to market forces in many inland regions, and also by differentiated early-life conditions as well as inequality of opportunity in access to quality education. These results are used to suggest directions to strengthen the role of public policies in reducing inequality of opportunities in both schooling and earnings.
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