Palestinian Firms’ Status and Employment Under the Israeli Security Regime: Evidence from Establishment Censuses

The Israeli occupation of Palestine is accompanied by violence and a repressive security regime affecting firms’ operations. We assess firms’ status, and female and total employment during 1997–2017 across region–years seeing differently repressive regimes. Indicators of the security regime come from OCHA-oPt, B’Tselem, and World Bank databases. Data on the entire population of establishments come from five waves of the Palestinian Establishment Census allowing for pooled-cross sectional and limited longitudinal analysis. We find that establishments facing tighter regimes – mobility restrictions, physical violence and building demolitions in their governorate – are more likely to suspend their operations or engage in restructuring, rather than continue operating. Repressive regimes are also associated with falling employment levels and in some cases, falling female employment shares. Repressive regimes are thus damaging to employment in Palestine through several channels. Some establishments do not survive, or enter hibernation. Surviving establishments retain fewer workers.