The Economic Returns to Schooling in the West Bank and Gaza Strip
The author uses micro data from the Labor Force Surveys conducted in the West Bank and the Gaza Strip during 1981-91 to show that during 1981-87 wage differences between schooling groups fell by well over one-half. This sharp reduction is associated with large increases in the size of the educated Palestinian labor force. Since the returns to schooling for Israeli Jews were stable, the decline in returns to schooling for Palestinians is consistent with the notion that the returns to schooling in the territories were determined largely by the forces of supply and demand in a segmented market for skilled labor. Copyright 1995 by American Economic Association.
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