This case study exploits matched firm-employee Tunisian data in order to underline the role played by within-firm human capital in worker remuneration. The estimated returns to human capital in wage equations remain unchanged when the dummies representing firm heterogeneity are replaced in the list of regressors with three firm variables: a textile industry dummy, within-firm mean education, and firm age. We find that part of what is usually considered as return to education may be due to within-firm externalities.

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