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

Sami H. Miaari; Robert M. Sauer

doi:10.1007/s11150-009-9081-6

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

Sami H. Miaari, Robert M. Sauer

Department of Economics

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Abstract

In this paper, we provide a lower bound estimate of the labor market costs of the Israeli–Palestinian conflict. The conflict is quantified by the number of overseas foreign workers in the Israeli labor market and the frequency of temporary closures of the West Bank and Gaza Strip. IV estimates, which exploit a source of exogenous variation in the number of overseas foreign workers, yield significant negative effects of the conflict on Palestinian employment rates in Israel and monthly earnings. Our cost-of-conflict estimates are also relevant for the literature on the economics of immigration.

Original language	English
Pages (from-to)	129-148
Number of pages	20
Journal	Review of Economics of the Household
Volume	9
Issue number	1
Early online date	27 Nov 2009
DOIs	https://doi.org/10.1007/s11150-009-9081-6
Publication status	Published - Mar 2011

Keywords

CONFLICT
IMMIGRATION
Foreign Workers
Closures
Employment
Earnings
INSTRUMENTAL VARIABLES

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10.1007/s11150-009-9081-6

http://link.springer.com/article/10.1007%2Fs11150-009-9081-6

Cite this

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AB - In this paper, we provide a lower bound estimate of the labor market costs of the Israeli–Palestinian conflict. The conflict is quantified by the number of overseas foreign workers in the Israeli labor market and the frequency of temporary closures of the West Bank and Gaza Strip. IV estimates, which exploit a source of exogenous variation in the number of overseas foreign workers, yield significant negative effects of the conflict on Palestinian employment rates in Israel and monthly earnings. Our cost-of-conflict estimates are also relevant for the literature on the economics of immigration.

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KW - Employment

KW - Earnings

KW - INSTRUMENTAL VARIABLES

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