Advanced Search
MyIDEAS: Login to save this paper or follow this series

The Labor Market Costs of Conflict: Closures, Foreign Workers, and Palestinian Employment and Earnings

Contents:

Author Info

  • Miaari, Sami H.

    ()
    (Hebrew University, Jerusalem)

  • Sauer, Robert M.

    ()
    (Royal Holloway, University of London)

Abstract

In this paper, we measure the implications of the Israeli-Palestinian conflict for Palestinian employment and earnings. We quantify the conflict by the frequency of temporary closures of the West Bank and Gaza Strip and the number of overseas foreign workers in the Israeli labor market. Data on Palestinian employment and earnings are taken from the Palestinian Labor Force Survey (PLFS) of the Palestinian Central Bureau of Statistics. The PLFS micro level panel data are combined with quarterly time series data on the number of foreign workers in Israel, the number of foreign worker permits issued by the Israeli government, and the frequency of temporary closures of the West Bank and Gaza Strip, between the years 1999 and 2004. Fixed-effects estimates which exploit the number of foreign worker permits issued by the Israeli government as an instrument for the number of foreign workers, yield large and statistically significant negative effects of the Israeli-Palestinian conflict on Palestinian employment rates in Israel and mean monthly earnings, regardless of work location (Israel or West Bank and Gaza Strip). Closures also significantly reduce Palestinian employment rates in Israel and mean monthly earnings. The impact of foreign workers is relatively stronger than the impact of closures because foreign workers are long-run substitutes for Palestinians in the Israeli labor market while closures represent only a transitory, short-run restriction on Palestinian labor supply. However, the impact of foreign workers also reflects a permanent effect of closures.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://ftp.iza.org/dp2282.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2282.

as in new window
Length: 43 pages
Date of creation: Sep 2006
Date of revision:
Publication status: published in: Review of Economics of the Household, 2011, 9 (1), 129-148
Handle: RePEc:iza:izadps:dp2282

Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org

Order Information:
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Email:

Related research

Keywords: instrumental variables; earnings; employment; closures; foreign workers; Israelis; Palestinians; immigration; conflict; panel data;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Miaari, Sami H. & Sauer, Robert M., 2006. "The Labor Market Costs of Conflict: Closures, Foreign Workers, and Palestinian Employment and Earnings," IZA Discussion Papers 2282, Institute for the Study of Labor (IZA).
  2. Alberto Alesina & Roberto Perotti, 1993. "Income Distribution, Political Instability, and Investment," NBER Working Papers 4486, National Bureau of Economic Research, Inc.
  3. Barro, Robert J, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 106(2), pages 407-43, May.
  4. Jaeger, David A. & Paserman, Daniele, 2005. "The Cycle of Violence? An Empirical Analysis of Fatalities in the Palestinian-Israeli Conflict," IZA Discussion Papers 1808, Institute for the Study of Labor (IZA).
  5. George J. Borjas, 2003. "The Labor Demand Curve Is Downward Sloping: Reexamining The Impact Of Immigration On The Labor Market," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 118(4), pages 1335-1374, November.
  6. Rachel M. Friedberg, 2001. "The Impact Of Mass Migration On The Israeli Labor Market," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 116(4), pages 1373-1408, November.
  7. David Card, 1990. "The impact of the Mariel boatlift on the Miami labor market," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 43(2), pages 245-257, January.
  8. Angrist, Joshua D, 1995. "The Economic Returns to Schooling in the West Bank and Gaza Strip," American Economic Review, American Economic Association, American Economic Association, vol. 85(5), pages 1065-87, December.
  9. Eckstein, Zvi & Tsiddon, Daniel, 2004. "Macroeconomic consequences of terror: theory and the case of Israel," Journal of Monetary Economics, Elsevier, Elsevier, vol. 51(5), pages 971-1002, July.
  10. Joshua Angrist, 1998. "The Palestinian Labor Market Between the Gulf War and Autonomy," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 98-5, Massachusetts Institute of Technology (MIT), Department of Economics.
  11. Angrist, Joshua D, 1996. "Short-Run Demand for Palestinian Labor," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 14(3), pages 425-53, July.
  12. Stephen G. Donald & Kevin Lang, 2007. "Inference with Difference-in-Differences and Other Panel Data," The Review of Economics and Statistics, MIT Press, vol. 89(2), pages 221-233, May.
  13. Jörn-Steffen Pischke & Johannes Velling, 1997. "Employment Effects Of Immigration To Germany: An Analysis Based On Local Labor Markets," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 594-604, November.
  14. Card, David, 2001. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 19(1), pages 22-64, January.
  15. Joseph G. Altonji & David Card, 1991. "The Effects of Immigration on the Labor Market Outcomes of Less-skilled Natives," NBER Chapters, in: Immigration, Trade and the Labor Market, pages 201-234 National Bureau of Economic Research, Inc.
  16. Venieris, Yiannis P & Gupta, Dipak K, 1986. "Income Distribution and Sociopolitical Instability as Determinants of Savings: A Cross-sectional Model," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 94(4), pages 873-83, August.
  17. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 110(3), pages 681-712, August.
  18. Joseph G. Altonji & David Card, 1989. "The Effects of Immigration on the Labor Market Outcomes of Natives," NBER Working Papers 3123, National Bureau of Economic Research, Inc.
  19. George J. Borjas, 1987. "Immigrants, minorities, and labor market competition," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 40(3), pages 382-392, April.
  20. Perotti, Roberto & Alesina, Alberto, 1996. "Income Distribution, Political Instability, and Investment," Scholarly Articles 4553018, Harvard University Department of Economics.
  21. Manishi Prasad & Peter Wahlqvist & Rich Shikiar & Ya-Chen Tina Shih, 2004. "A," PharmacoEconomics, Springer Healthcare | Adis, Springer Healthcare | Adis, vol. 22(4), pages 225-244.
  22. John M. Abowd & Richard B. Freeman, 1991. "Immigration, Trade and the Labor Market," NBER Books, National Bureau of Economic Research, Inc, number abow91-1.
  23. Eli Berman & David Laitin, 2005. "Hard Targets: Theory and Evidence on Suicide Attacks," NBER Working Papers 11740, National Bureau of Economic Research, Inc.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. El-Attar, Mayssun, 2009. "Could Education Promote the Israeli-Palestinian Peace Process?," IZA Discussion Papers 4447, Institute for the Study of Labor (IZA).
  2. Massimiliano Calì & Sami H. Miaari, 2012. "The labour market impact of mobility restrictions: Evidence from the West Bank," HiCN Working Papers 130, Households in Conflict Network.
  3. Siddig, Khalid H.A. & Flaig, Dorothee & Luckmann, Jonas & Grethe, Harald, 2011. "A 2004 Social Accounting Matrix for Israel: Documentation of an Economy-Wide Database with a Focus on Agriculture, the Labour Market, and Income Distribution," Working Papers, Universitaet Hohenheim, Institute of Agricultural Policy and Agricultural Markets 110156, Universitaet Hohenheim, Institute of Agricultural Policy and Agricultural Markets.
  4. Francesco Amodio & Michele Di Maio, 2014. "Making Do with What You Have: Conflict, Firm Performance and Input Misallocation in Palestine," HiCN Working Papers 179, Households in Conflict Network.
  5. Ted Aranki & Yousef Daoud, 2010. "Competition, substitution, or discretion: an analysis of Palestinian and foreign guest workers in the Israeli labor market," Journal of Population Economics, Springer, Springer, vol. 23(4), pages 1275-1300, September.
  6. Sami Miaari & Robert Sauer, 2011. "The labor market costs of conflict: closures, foreign workers, and Palestinian employment and earnings," Review of Economics of the Household, Springer, Springer, vol. 9(1), pages 129-148, March.
  7. Etkes, Haggay, 2011. "The impact of employment in Israel on the Palestinian labor force (2005–08)," MPRA Paper 34681, University Library of Munich, Germany.
  8. Geesche M. Merkle & Rico Ihle & Yael Kachel & Ulf Liebe, 2013. "Economic cooperation despite of political conflict: Israeli traders’ perception of Israeli-Palestinian food trade," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 151, Courant Research Centre PEG.
  9. Caruso, Raul & Gavrilova, Evelina, 2011. "Youth Unemployment, Terrorism and Political Violence, Evidence from the Israeli/Palestinian Conflict," NEPS Working Papers, Network of European Peace Scientists 6/2011, Network of European Peace Scientists.
  10. Di Maio, Michele & Nandi, Tushar K., 2013. "The effect of the Israeli–Palestinian conflict on child labor and school attendance in the West Bank," Journal of Development Economics, Elsevier, Elsevier, vol. 100(1), pages 107-116.
  11. Sami Miaari & Asaf Zussman & Noam Zussman, 2012. "Employment Restrictions and Political Violence in the Israeli-Palestinian Conflict," Economics of Security Working Paper Series 59, DIW Berlin, German Institute for Economic Research.
  12. Etkes Haggay, 2012. "The Impact of Employment in Israel on the Palestinian Labor Force," Peace Economics, Peace Science, and Public Policy, De Gruyter, De Gruyter, vol. 18(2), pages 1-36, August.
  13. Ihle, Rico & Rubin, Ofir D., 2013. "Consequences of unintended food policies: Food price dynamics subject to the Israeli–Palestinian conflict," Food Policy, Elsevier, Elsevier, vol. 42(C), pages 96-105.
  14. Maren M. Michaelsen, 2012. "Mental Health and Labour Supply – Evidence from Mexico‘s Ongoing Violent Conflicts," Ruhr Economic Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen 0378, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp2282. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.