Date: 2009
Type: Working Paper
The Public-Private Wage Differential in the West Bank and Gaza: Before and During the Second Intifada
Working Paper, EUI MWP, 2009/13
MIAARI, Sami H., The Public-Private Wage Differential in the West Bank and Gaza: Before and During the Second Intifada, EUI MWP, 2009/13 - https://hdl.handle.net/1814/11483
Retrieved from Cadmus, EUI Research Repository
This paper measures the public-private wage differential in the West Bank and Gaza and describes its dynamics before and during the second Intifada using data from the Palestinian Labour Force Survey (PLFS) of the Palestinian Central Bureau of Statistics (PCBS). Because the distribution of individual characteristics and their returns might differ across workers, the wage differential is decomposed into two components: a “human capital” effect and an “unexplained” effect. The results show that in the pre-Intifada period, the wage gap between the public and private sectors had narrowed both in the West Bank and Gaza. However, a sharp increase is seen in the post-Intifada Period. Moreover, most of this increase comes from an increase in “returns” to skill composition in the public sector (unexplained effect), rather than a change in the skill composition of public sector workers (human capital effect). An analysis of the public-private sector wage gap from 1998 to 2006 at various points along the wage distribution using recent quantile regression econometric techniques shows that the wage premium (penalty) for the public sector varies across the distribution, being higher (lower) at the lowest end of the wage distribution and decreasing (increasing) along the wage distribution; it becomes negative in the top percentiles.
Cadmus permanent link: https://hdl.handle.net/1814/11483
ISSN: 1830-7728
Series/Number: EUI MWP; 2009/13
Keyword(s): Decomposition Palestine public sector quantile wage gap West Bank and Gaza J31 J45 C14 C24
Sponsorship and Funder information:
I am deeply grateful to Luay Shabanch of the Palestinian Central Bureau of Statistics for providing the Palestinian Labour Force Survey data; I owe special thanks to Michael Beenstock, Daniele Paserman,
Robert Sauer, Eytan Sheshinski, Asaf Zussman, and Noam Zussman for their helpful suggestions and comments.