The Impact of Employment in Israel on the Palestinian Labor Force

36 Pages Posted: 19 Dec 2011

Date Written: December 18, 2011


This study provides circumstantial evidence for the impact of permits for employment in Israel on the Palestinian labor force in the West Bank during the late Intifada period and its aftermath (2005-2008). The study utilizes a unique dataset that merges data from the Palestinian Labor Force Survey with Israeli administrative data on permits for employment in Israel. The study quantifies the increase in Palestinian employment in the Israeli and Palestinian economies and the decrease in Palestinian unemployment, as well as the drop in the return to schooling which coincided with an increase in the number of permits issued. These results reflect the short-run benefits for the un-skilled Palestinian labor force as well as the adverse long-run effects of Palestinian employment in Israel on human capital accumulation.

Keywords: West Bank, Palestine, Israel

JEL Classification: J00, J70, J68, J15, J61, J62

Suggested Citation

Etkes, Haggay, The Impact of Employment in Israel on the Palestinian Labor Force (December 18, 2011). Available at SSRN: or

Haggay Etkes (Contact Author)

Bank of Israel ( email )

P.O. Box 780
Jerusalem, 91907

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