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Education and allocation of skills in Tunisia: evidence from an education reform

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  • Tuomas Pekkarinen
  • Miquel Pellicer

Abstract

An often cited explanation for the weak growth effects of education in developing countries is the misallocation of educated workers to inefficient activities in the public sector. This paper assesses the strength of this argument by studying the effect of educational attainment on employment status of Tunisian men. We exploit policy changes that restricted access to secondary education in the 1970’s as an instrument for education and use data from 2004 Tunisian census as well as 2010 Labor Force Survey to estimate the effect of education on working in different sectors and within specific occupational categories. Consistently with the misallocation argument, we find that education increases employment, but that this increase is concentrated either in relatively low skill white collar occupations or in the public sector. Given that our instrument probably affected the academically weaker students this pattern of results suggests that the public sector might inefficiently reward titles. Copyright Pekkarinen and Pellicer; licensee Springer. 2013

Suggested Citation

  • Tuomas Pekkarinen & Miquel Pellicer, 2013. "Education and allocation of skills in Tunisia: evidence from an education reform," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-21, December.
    • Handle: RePEc:spr:izaldv:v:2:y:2013:i:1:p:1-21:10.1186/2193-9020-2-14
    DOI: 10.1186/2193-9020-2-14
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    1. Tansel, Avsit, 2005. "Public-Private Employment Choice, Wage Differentials, and Gender in Turkey," Economic Development and Cultural Change, University of Chicago Press, vol. 53(2), pages 453-477, January.
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    3. Riddell, W. Craig & Song, Xueda, 2011. "The impact of education on unemployment incidence and re-employment success: Evidence from the U.S. labour market," Labour Economics, Elsevier, vol. 18(4), pages 453-463, August.
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    Cited by:

    1. Pellicer, Miquel, 2018. "The evolution of returns to education in the Middle East and North Africa: Evidence from comparable education policy changes in Tunisia," Economics of Education Review, Elsevier, vol. 62(C), pages 183-191.
    2. Ragui Assaad & Miquel Pellicer & Caroline Krafft & Colette Salemi, 2002. "Grievances or Skills? The Effect of Education on Youth Attitudes and Political Participation in Egypt and Tunisia," Working Papers 1103, Economic Research Forum, revised 01 Jun 2002.

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