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Decomposing Wage Gaps between Ethnic Groups: The Case of Israel

Author

Listed:
  • Gad Levanon

    (Department of Economics, Princeton University)

  • Yaron Raviv

    (Department of Economics, Claremont McKenna College)

Abstract

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.

Suggested Citation

  • Gad Levanon & Yaron Raviv, 2007. "Decomposing Wage Gaps between Ethnic Groups: The Case of Israel," Southern Economic Journal, Southern Economic Association, vol. 73(4), pages 1066-1087, April.
  • Handle: RePEc:sej:ancoec:v:73:4:y:2007:p:1066-1087
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    References listed on IDEAS

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    1. Cotton, Jeremiah, 1988. "On the Decomposition of Wage Differentials," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 236-243, May.
    2. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    3. Koenker,Roger, 2005. "Quantile Regression," Cambridge Books, Cambridge University Press, number 9780521845731, December.
    4. David Neumark, 1988. "Employers' Discriminatory Behavior and the Estimation of Wage Discrimination," Journal of Human Resources, University of Wisconsin Press, vol. 23(3), pages 279-295.
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    Cited by:

    1. Ahmed, Salma, 2015. "Dynamics and diversity: How are religious minorities faring in the labour Market in Bangladesh?," MPRA Paper 75153, University Library of Munich, Germany, revised 18 Nov 2016.
    2. Muhammad Asali, 2008. "Wage Differentials in Israel: Endowments, Occupational Segregation, Discrimination, and Selectivity," Working Papers 011-08, International School of Economics at TSU, Tbilisi, Republic of Georgia.
    3. 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) 1508, Department of Economics - dECON.

    More about this item

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J7 - Labor and Demographic Economics - - Labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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