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Examining Industry Wage Differentials in the Palestinian Territories

Author

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  • Adnan Wifag

    (Assistant Professor of Economics, College of Business, Zayed University, Apt 202 Spark Building Al Falah Street, Abu Dhabi, UAE)

Abstract

It has been widely documented that there is a high level of inter-industry wage dispersion in the United States and several other developed countries. Unfortunately, due to the lack of data availability, industry wage differentials in developing countries have been examined in only a few studies and have been constrained by data limitations. Identifying the causes of industry wage differentials is crucial because it has policy implications toward mitigating wage inequality and unemployment. In this paper, I investigate industry wage differentials in the Palestinian territories – the West Bank and the Gaza Strip – using a rich dataset that allows cross-sectional and longitudinal analyses. I find that observed labor quality, unobserved labor quality, and labor market segmentation along the public and private sector represent the most suitable explanations for inter-industry wage dispersion in the Palestinian territories. Additionally, there is (limited) evidence of a shirking model especially in Gaza.

Suggested Citation

  • Adnan Wifag, 2014. "Examining Industry Wage Differentials in the Palestinian Territories," Review of Middle East Economics and Finance, De Gruyter, vol. 10(2), pages 123-150, August.
    • Handle: RePEc:bpj:rmeecf:v:10:y:2014:i:2:p:28:n:2
    DOI: 10.1515/rmeef-2013-0046
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    References listed on IDEAS

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    1. 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, vol. 9(1), pages 129-148, March.
    2. Philip Du Caju & Gábor Kátay & Ana Lamo & Daphne Nicolitsas & Steven Poelhekke, 2010. "Inter-Industry Wage Differentials In EU Countries: What Do Cross-Country Time Varying Data Add to the Picture?," Journal of the European Economic Association, MIT Press, vol. 8(2-3), pages 478-486, 04-05.
    3. Arbache, Jorge Saba & Dickerson, Andy & Green, Francis, 2004. "Assessing the stability of the inter-industry wage structure in the face of radical economic reforms," Economics Letters, Elsevier, vol. 83(2), pages 149-155, May.
    4. Erkan Erdil & I. Hakan Yetkiner, 2001. "A comparative analysis of inter-industry wage differentials: industrialized versus developing countries," Applied Economics, Taylor & Francis Journals, vol. 33(13), pages 1639-1648.
    5. Mellow, Wesley & Sider, Hal, 1983. "Accuracy of Response in Labor Market Surveys: Evidence and Implications," Journal of Labor Economics, University of Chicago Press, vol. 1(4), pages 331-344, October.
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    Cited by:

    1. Adnan, Wifag, 2015. "Who gets to cross the border? The impact of mobility restrictions on labor flows in the West Bank," Labour Economics, Elsevier, vol. 34(C), pages 86-99.

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    Keywords

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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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