Wage differentials and economic restrictions: Evidence from the Occupied Palestinian Territories

Belal Fallah () and Yousef Daoud ()
Additional contact information
Belal Fallah: Department of Economics and Financial Sciences, Palestine Polytechnic University, Hebron, Palestine.
Yousef Daoud: Department of Economics, Birzeit University, Ramallah, Palestine.

Economics of Peace and Security Journal, 2015, vol. 10, issue 1, 13-22

Abstract: The article examines the wage impact of Israel’s constraints on economic activities and infrastructure development in the West Bank’s Area C. We provide evidence to show that Area C workers suffer a wage penalty of about 8 percent relative to workers in Areas A and B. The results also show that when controlling for worker characteristics, the magnitude of the Area C wage differential drops by about half. We then extend our analysis to compare average wages between Area C workers and other rural workers and show that the wage difference is statistically insignificant. This indicates that the Area C wage differential we observe can be attributed primarily to a rural environment effect rather than to Israeli economic restrictions placed on Area C per se. This result indicates that the effect of Israeli restrictions on Area C wages is neutralized. We show that negative labor supply shocks (commuting) serve as a potential transmission mechanism. Specifically, we show that Area C residents are more likely to commute than their peers in other rural areas.

Keywords: Economic restrictions; wage differentials; commuting; labor supply; labor demand (search for similar items in EconPapers)
JEL-codes: J01 J30 J61 R11 (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.epsjournal.org.uk/index.php/EPSJ/article/view/200 (application/pdf)
Open access 24 months after original publication.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:epc:journl:v:10:y:2015:i:1:p:13-22

Access Statistics for this article

Economics of Peace and Security Journal is currently edited by Michael Brown and J Paul Dunne

More articles in Economics of Peace and Security Journal from EPS Publishing Contact information at EDIRC.
Bibliographic data for series maintained by Michael Brown, Managing Editor, EPSJ ().