Examining Industry Wage Differentials in the Palestinian Territories

Wifag Adnan

Review of Middle East Economics and Finance, 2014, vol. 10, issue 2, 123-150

Abstract: It has been widely documented that there is a high level of inter-industry wage dispersion in the United States and several other developed countries. Unfortunately, due to the lack of data availability, industry wage differentials in developing countries have been examined in only a few studies and have been constrained by data limitations. Identifying the causes of industry wage differentials is crucial because it has policy implications toward mitigating wage inequality and unemployment. In this paper, I investigate industry wage differentials in the Palestinian territories – the West Bank and the Gaza Strip – using a rich dataset that allows cross-sectional and longitudinal analyses. I find that observed labor quality, unobserved labor quality, and labor market segmentation along the public and private sector represent the most suitable explanations for inter-industry wage dispersion in the Palestinian territories. Additionally, there is (limited) evidence of a shirking model especially in Gaza.

Keywords: inter-industry wage dispersion; industry wage differentials; efficiency wages; labor market segmentation; Palestinian territories (search for similar items in EconPapers)
JEL-codes: J31 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (1)

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DOI: 10.1515/rmeef-2013-0046

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