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The Integration of Palestinian-Israeli Labour Markets: A CGE Approach

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  • Flaig, Dorothee
  • Siddig, Khalid H.A.
  • Grethe, Harald
  • Luckmann, Jonas
  • McDonald, Scott

Abstract

A high number of Palestinian workers used to work in Israel for decades. They are mostly employed in low-skilled jobs in Israeli sectors which are highly dependent on foreign labour, namely agriculture and construction. With the beginning of the second Intifada in 2000 border restrictions increased severely due to security concerns, limiting employment possibilities for Palestinians and leaving Palestine with severe unemployment and loss of income. Israeli employers have substituted Palestinian workers with an increasing number of foreign workers, mostly coming from Asia. Growing unemployment among Israeli unskilled workers caused Israel to impose quotas on the employment of foreigners. The purpose of this paper is to estimate the benefits of lifting movement and access restrictions between Israel and the West Bank for both economies. The macro-economic effects of the Israeli labour policy are important to determine the absorptive capacity of the Israeli labour market. Therefore, we use an extended version of the single country CGE model “STAGE” (McDonald, 2009), adapted to a Social Accounting Matrix (SAM) of Israel for the year 2004 (Siddig et al., forthcoming), to simulate the effects of different Israeli labour policy regimes.

Suggested Citation

  • Flaig, Dorothee & Siddig, Khalid H.A. & Grethe, Harald & Luckmann, Jonas & McDonald, Scott, 2011. "The Integration of Palestinian-Israeli Labour Markets: A CGE Approach," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103861, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea11:103861
    DOI: 10.22004/ag.econ.103861
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    Cited by:

    1. Missaglia, Marco & Valensisi, Giovanni, 2014. "Trade policy in Palestine: A reassessment," Journal of Policy Modeling, Elsevier, vol. 36(5), pages 899-923.
    2. Dorothee Flaig & Harald Grethe & Scott McDonald & Khalid Siddig, 2012. "Intersectoral factor movements: do adjustment costs matter for welfare?," EcoMod2012 4418, EcoMod.
    3. Boeters, Stefan & Savard, Luc, 2013. "The Labor Market in Computable General Equilibrium Models," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 1645-1718, Elsevier.

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    Keywords

    Labor and Human Capital;

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