Wage Differential between Palestinian Non-refugees and Palestinian Refugees in the West Bank and Gaza

Related publications

• Working Paper No.976 11 November 2020

  The Palestinian Labor Market over the Last Three Decades

  Sameh Hallaq
  Abstract

  This paper consists of three economic literature review essays that survey the Palestinian labor market during the last three decades. The first essay examines the economic return to schooling since 1981 until the recent period, taking into consideration the major shocks that the Palestinian economy experienced, such as the First and Second Palestinian Intifadas (1987–93 and 2000–5), respectively, and the establishment of the Palestinian National Authority in 1993. A special focus is laid on overcoming the potential endogeneity arising from the schooling coefficient. The second essay discusses the economic costs of several conflict measures (e.g., time and geographical variation in fatalities and other conflict incidents, days under curfews, checkpoints, movement restrictions, and substitution of foreigner workers for Palestinian labor) on the labor market and human capital. Earnings and unemployment are the main labor market indicators, while the human capital impact was assessed by educational attainment. The third essay sheds light on the wage differential in the Palestinian labor market due to geographical and employment sector factors.

  Download Working Paper No. 976 PDF (290.54 KB)
• Working Paper No.965 28 July 2020

  First Palestinian Intifada and Intergenerational Transmission of Human Capital

  Sameh Hallaq
  Abstract

  This paper attempts to estimate the intergenerational transmission of human capital in Palestine. The main question is whether formal parental education improves their offspring’s cognitive skills and school achievements. I use the instrumental variable (IV) method in the estimations to overcome the potential endogeneity of parental education. The main source of variation in parental educational attainment is parents’ exposure to the First Palestinian Intifada (1988–93) during their middle- and high school ages. During the First Palestinian Intifada, many school days were lost due to frequent school closures and other restrictions. Furthermore, many young people preferred to search for low-skill employment in Israel, since it provided them with better wages than the local labor market and hardly required any level of educational attainment. This study employs two outcomes, namely the standardized cognitive test scores and school achievements during the academic year 2012/13 for students between grade 5 and grade 9 in West Bank schools. Overall, the results support the hypothesis of a human capital spillover but more so for girls than for boys, where the IV results are often insignificant because of their large standard errors.

  Download Working Paper No. 965 PDF (539.77 KB)
• Working Paper No.1037 10 January 2024

  Markups, Profit Shares, and Cost-Push-Profit-Led Inflation

  Michalis Nikiforos, Simon Grothe and Jan David Weber
  Abstract

  The post-pandemic surge in inflation was accompanied by a surge in the corporate share of profits. As a result, several economists and policy makers have given to it names such as “profit-led inflation” or “sellers’ inflation.” The present paper discusses the extent to which profit-led inflation, as an explanation for the recent surge in inflation, is compatible with what we know about the price-setting behavior of firms, income distribution, and inflation. We do that in juxtaposition to two recent critiques: that the increase in the profit share is the result of cyclical factors, and that the increase in import prices leads to higher profit shares even under constant markups. We show that there is little evidence that the recent surge in profitability is cyclical in nature. Moreover, after outlining the Structuralist/Kaleckian theories of prices and inflation we argue that profit-led inflation does not require an increase in the markup of the firms and is consistent with these theories. In the face of large import and other price shocks even under constant markups, firms are able to pass the burden of adjustment to real wages. Thus, the term profit-led emphasizes the distributional source and consequences of inflation. We also provide an empirical examination of the markups in the post-pandemic period using data from the Compustat database. We show that, on average, firms were able to increase or maintain their markups, although there is significant heterogeneity across sectors or the position of the firms in the distribution of markups.

  Download Working Paper No. 1037 PDF (408.42 KB)