The evolution of returns to education in the Middle East and North Africa: Evidence from comparable education policy changes in Tunisia

Returns to education in the Middle East and North Africa (MENA) region are thought to have decreased in recent decades leading to youth frustration and political mobilization. Existing estimates of the evolution of education returns in the region have not had a causal focus and observed patterns may be driven by changes in selection bias as educational attainment expanded from a privileged few to large masses of the population. This paper exploits three comparable education policy changes over more than two decades in Tunisia to estimate the effect of education on public sector employment for different cohorts born from the 1950s to the 1970s. I combine census and labor force surveys from 2004 to 2010 amounting to more than one million observations of relevant cohorts. I find that returns have decreased across cohorts by around 1/3 although they remain large even for the later cohorts.