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Decomposing Wage Gaps between Ethnic Groups: The Case of Israel


Author Info

  • Gad Levanon

    (Department of Economics, Princeton University)

  • Yaron Raviv

    (Department of Economics, Claremont McKenna College)


Past investigations of the income gaps between Jews and non-Jews in Israel treat non-Jews as one group. In this paper we separate the non-Jewish group into three main religious minorities: Muslims, Christians, and Druze and focus on the northern part of Israel, where most minorities live. Using the latest Israeli census, we find significant explained and unexplained income gaps in favor of Jews. The unexplained gaps tend to be larger the more educated the individual. Jews have much higher representation in the more lucrative occupations, and earn significantly more in them. Muslims generally suffer from the largest income gaps, while Druze have the lowest income gaps, reflecting direct and indirect benefits reaped from serving in the army. Among minorities, Christians are the most educated and most concentrated in the top occupations, which explains why they have the lowest gaps in the highest percentiles of the income distribution.

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Bibliographic Info

Article provided by Southern Economic Association in its journal Southern Economic Journal.

Volume (Year): 73 (2007)
Issue (Month): 4 (April)
Pages: 1066–1087

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Handle: RePEc:sej:ancoec:v:73:4:y:2007:p:1066-1087

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Cited by:
  1. Muhammad Asali, 2008. "Wage Differentials in Israel: Endowments, Occupational Segregation, Discrimination, and Selectivity ," Working Papers, International School of Economics at TSU, Tbilisi, Republic of Georgia 011-08, International School of Economics at TSU, Tbilisi, Republic of Georgia.
  2. Marisa Bucheli & Rafael Porzecanski, 2008. "Racial Inequality in the Uruguayan Labor Market:An analysis of wage differentials between Afrodescendants and whites," Documentos de Trabajo (working papers), Department of Economics - dECON 1508, Department of Economics - dECON.


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