Labor market in Palestine
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In this article I analyze the labor market in the West Bank and Gaza Strip during the period following the Al-Aqsa Intifada 2000 - 2008, and estimate the influence of changes in the rate of unemployment and daily wages on the labor force participation rate in both territories. This study estimated labor force participation rate functions in the West Bank and Gaza Strip by using regression analysis. It was found that the discouraged workers’ effect dominated the added workers’ effect in both the West Bank and Gaza labor force. Also, it was found that the daily wage had no statistical influence on the participation rate in West Bank. That can be explained by the political situation in that territory represented by the frequent curfews and numerous Israeli check points, which restrict labor mobility and hence, participation. However, the daily wages had the expected sign but only that for the Gaza Strip was statistically significant. So to combat the phenomenon of widespread unemployment in the Palestinian territories should create economic policies by implementing measures to improve the investment environment, and encourage the private sector to play a more active role in the region.