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Institutional versus labor market discrimination: The case of Israeli Arabs

Author

Listed:
  • Gil Epstein

    (Bar Ilan University, Israel, CReAM, London and IZA, Bonn)

  • Dalit Gafni

    (The College of Management, Israel)

  • Erez Siniver

    (The College of Management, Israel)

Abstract

Economic outcomes are compared between Jewish and Arab university graduates in Israel. A unique dataset is used which includes all individuals who graduated with a first degree from universities and colleges in Israel during the period 1995-2008. The findings show that the wage gap between Jewish men and Arab men is a result of differences in skills that the workers bring to the labor market rather than racial discrimination against Arab men. Thus, there is no wage gap between Jewish men and Arab men with the same skill levels and human capital. In contrast, among women there exist wage gaps that are the result of statistical discrimination. The wage gap between Israeli Jewish women and Israeli Arab women with psychometric entrance score of 600 disappears after five years in the labor market. The difference in average psychometric entrance test scores between Israeli Arabs and Israeli Jews tends to indicate the existence of institutional discrimination in the allocation of public investment in education as opposed to labor market discrimination.

Suggested Citation

  • Gil Epstein & Dalit Gafni & Erez Siniver, 2016. "Institutional versus labor market discrimination: The case of Israeli Arabs," Economics Bulletin, AccessEcon, vol. 36(3), pages 1670-1685.
    • Handle: RePEc:ebl:ecbull:eb-16-00482
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    References listed on IDEAS

    as
    1. Kevin Lang & Michael Manove, 2011. "Education and Labor Market Discrimination," American Economic Review, American Economic Association, vol. 101(4), pages 1467-1496, June.
    2. Neal, Derek A & Johnson, William R, 1996. "The Role of Premarket Factors in Black-White Wage Differences," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 869-895, October.
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    Cited by:

    1. Lippens, Louis & Baert, Stijn & Ghekiere, Abel & Verhaeghe, Pieter-Paul & Derous, Eva, 2020. "Is labour market discrimination against ethnic minorities better explained by taste or statistics? A systematic review of the empirical evidence," GLO Discussion Paper Series 615, Global Labor Organization (GLO).
    2. Veronese, Guido & Pepe, Alessandro & Dagdukee, Jamal & Yaghi, Shaher, 2018. "Teaching in conflict settings: Dimensions of subjective wellbeing in Arab teachers living in Israel and Palestine," International Journal of Educational Development, Elsevier, vol. 61(C), pages 16-26.

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    More about this item

    Keywords

    wage differences; minorities discrimination; statistical discrimination; taste base discrimination;
    All these keywords.

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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