Private–Public Sector Employment Choice and Wage Differentials in Palestine: A Gender Perspective

Abstract

This study is the first to analyze wage differentials and sector choice by gender in Palestine. It uses Palestine Central Bureau of Statistics Labor Force Surveys for the years 1999, 2001, 2007, and 2010. The results show positive, although relatively low, returns to education at all levels. They indicate stark differences by gender from the viewpoint of sector choice, returns to education, and decomposition of sector and gender wage differentials. The low returns to education in Palestine tend to diminish the importance of the endowment effect in explaining the sector and gender wage gaps. Analysis of gender wage differentials shows that in the public sector, predicted log hourly wages are consistently higher for women than men, but in the private and ‘other’ sectors the results are mixed. Such wage differentials help explain why better educated women migrate toward the public sector, and those with lower educational levels are more likely to be found in the private sector.