Gender Differences in Palestinian Territories

The data used in this analysis stem from the Labor Force Surveys provided by the Palestinian Central Bureau of Statistics. The survey design follows recom-mendations of the International Labor Organization and is intended to provide a

Figure 5.1: Gender Wage Gap, 1996−2006

Note: The gender wage gap is represented from the 2nd quarter of 1996 to the 4th quarter in 2006 in a 9-quarter moving average of the median real daily wage of women over that of men.

representative sample on the district level. Individuals are drawn on a quarterly base in repeated rounds from a two-stage stratified cluster random sample. The accrued rotated panel covers 1/6 of the total sample in each round in all sample areas. I restrict the sample to full-time working men and women aged between 26 and 65. Over the entire period from 1996 to 2006 this yields 164,290 labor market observations for men and 39,498 for women living in 112,381 households. The wage variable used is the real daily wage expressed in 1996 NIS (New Israeli Shekel).

Figure 5.1 shows the gender wage trend in the Palestinian Territories after 1996.

The wage differential in this graph is represented by the 9-quarter moving average of the median real daily wage of women over that of men. The unadjusted wage gap between male and female workers increased till 1999 and decreased sharply after the outbreak of the Second Intifada. The catch-up of female wages to the male wage level after the year 2000 is especially strong till the year 2003. Within only 7 years the ratio of female over male wages increases from 72 percent in 1999 to 95 percent in 2006. Changes in the gender wage gap can occur due to changes in womens’ characteristics relative to men’s or due to changes in their relative returns.

Table 5.1 therefore presents changes in potential wage determinants for the pe-riod of interest for women and men. The first row depicts the log real daily wage by gender pooled for years before and during the Second Intifada. The observed real wages are always higher for men. However, the wage differential between sexes amounts to an average of 26 percent in the period before the Second Intifada and

Table 5.1: Gender Differences in Socio-Economic Characteristics

log wage 4.1290 3.8693 0.2597 3.9429 3.8300 0.1129 -0.1468 university 0.2417 0.3724 -0.1307 0.2799 0.3940 -0.1141 -0.0166 years school 10.0365 9.2402 0.7963 10.6819 9.9800 0.7019 -0.0944 experience 21.9358 23.4973 -1.5615 22.4071 23.1702 -0.7631 -0.7984

urban 0.4411 0.3980 0.0431 0.4664 0.4088 0.0576 0.0145

rural 0.4030 0.4861 -0.0831 0.3428 0.4470 -0.1042 0.0211

camp 0.1560 0.1159 0.0401 0.1908 0.1442 0.0466 0.0065

Gaza 0.3057 0.1821 0.1236 0.3356 0.2264 0.1092 -0.0144

West Bank 0.6943 0.8179 -0.1236 0.6644 0.7736 -0.1092 -0.0144 work Israel 0.2245 0.0234 0.2011 0.1049 0.0124 0.0925 -0.1086

Note:∆¹is calculated as mean value of males minus mean value of females for observations pooled for the period before the Second Intifada. ∆²is calculated respectively for the period during the Second Intifada.

narrows down to 11.3 percent for observations pooled over years during the Second Intifada. The educational background of labor market participants is controlled for by two variables. One measures the years of schooling, of which men are accumulating 0.8 more in the first period or 0.7 more in the second period. Interest-ingly, measuring schooling success by a tertiary degree indicates that the schooling distribution of females is very different to that of males. There are as much as 13.1 percent more female wage earners holding a university degree as their male counterparts before the year 2000. Even though this difference is reduced slightly for the years after the Al-Aqsa movement it still points to a distinct selection into labor market activity for women compared to men. Women which have enjoyed higher education seem to face higher costs in staying out of the labor market. It is therefore important to control for the educational background of wage earners in both dimensions, years of schooling and university degree, as their schooling dis-tribution differs considerably. Women in this sample seem to be more experienced than men.² What is important to notice is that differences in wages, education and experience between sexes are smaller in absolute terms after the outbreak of the Sec-ond Intifada. This is not the case for the regional provenance of the worker. While women are most likely to work in rural areas, men are most likely to work in urban areas. This difference increases after the year 2000. The gender differences in labor market activity between Gaza and West Bank is smaller in the second period. While

2However, due to a lack of information on actual job experience and job interruptions, I calculated potential experience as standardized by the literature (age minus schooling years minus 6). This might lead to an overestimation of the actual job experience of women compared to that of men.

30.6 percent of the male wage earners observed between 1996 and 1999 are Gazian, only 18.2 percent of the working women are from Gaza. For the second period the share of Gazians with observed wage increases for both sexes, but Gazian women gain relative importance. The biggest convergence in wage related labor market characteristics, however, can be found in the last row of Table 5.1. While before the Second Palestinian Uprising 22.5 percent of the Palestinian men work in Israel, only 2.3 percent of the Palestinian women commute to a workplace across the border.

This huge difference decreases in the second half of the observation period due to a decline in labor market mobility of Palestinian men. After the year 2000 only 10.5 percent of the Palestinian male workers report to work in Israel. To sum up findings so far: If one can expect wages to vary along the socio-economic character-istics as stated in Table 5.1, then a reduction in differences along those observable characteristics may explain a decrease in the gender wage gap as depicted in Figure 5.1. The only labor-market relevant characteristic in which gender differences are not reduced is the type of locality the workers live in. The extent to which this increase in gender differences may contribute to a widening of wage differen-tials between men and women is determined by the difference in renumeration for work across these locality types. This analysis will follow in Section 5.4 of this work.