The Effect of Labor-Demand Shocks on Women’s Participation in the Labor Force: Evidence from Palestine

53 Pages Posted: 3 Jul 2019

See all articles by Belal Fallah

Belal Fallah

Palestine Polytechnic University

Marcelo Bergolo

Universidad de la Republica - Instituto de Economía; IZA Institute of Labor Economics

Iman Saadeh

Palestine Economic Policy Research Institute (MAS)

Arwa Abu Hashhash

Palestine Economic Policy Research Institute (MAS)

Mohamad Hattawy

Birzeit University

Date Written: June 26, 2019

Abstract

Two interesting facts emerge from the Palestinian labor market. Educational attainment for women swiftly expanded during the 1999-2011 period, but the labor force-participation rate (LFPR) for educated women stagnated—and disproportionately so for young educated women. We investigated whether changes in labor demand contributed to women’s sluggish labor-force participation (LFP). Our empirical analysis used quarterly labor-force data published by Palestine Census Bureau of Statistics (PCBS) between 2005 and 2011. To explore the causal effect of labor demand, we employed a fixed-effects model using the instrumental-variable approach. We provide evidence that changes in demand for educated women workers affect their LFP, indicating that the negative demand shocks that young educated women have encountered in recent years may have contributed to their sluggish LFP. Interestingly, the decrease in the demand for educated women is not driven by job competition with similarly situated men. This research has important implications for policy regarding the economic empowerment of educated women in Palestine and suggests that enhanced labor demand for educated women is vital to boost their labor-force participation.

Keywords: labor economics, labor demand, labor-force participation

JEL Classification: J21, J01

Suggested Citation

Fallah, Belal and Bergolo, Marcelo and Saadeh, Iman and Abu Hashhash, Arwa and Hattawy, Mohamad, The Effect of Labor-Demand Shocks on Women’s Participation in the Labor Force: Evidence from Palestine (June 26, 2019). Partnership for Economic Policy Working Paper No.2019-08. Available at SSRN: https://ssrn.com/abstract=3410521 or http://dx.doi.org/10.2139/ssrn.3410521

Belal Fallah (Contact Author)

Palestine Polytechnic University ( email )

Palestine

Marcelo Bergolo

Universidad de la Republica - Instituto de Economía ( email )

Montevideo
Uruguay

HOME PAGE: http://www.iecon.ccee.edu.uy

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Iman Saadeh

Palestine Economic Policy Research Institute (MAS) ( email )

Palestine

Arwa Abu Hashhash

Palestine Economic Policy Research Institute (MAS) ( email )

Palestine

Mohamad Hattawy

Birzeit University ( email )

Ramallah
Palestine

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