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Description:
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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 . |