This study treats the relationship between labor force composition and income as outlined by alternative models, competition and segregation. Analyses of 323 Israeli occupations focus on the relations between the income of EuropeanlAmerican men and the proportions of women, Arab men, and AsianlAfrican men across the entire occupational spectrum, as well as in the core and peripheral sectors of the economy. Using two-wave regression models for 1972-1983, ze find: (a) Segregation of women, Arabs, and AsianlAfrican Jews did not significantly increase. (b) Occupations with high proportions of subordinate groups experienced a relative decline in the income of superordinates. (c) This process of competition was especially pronounced in the periphery. The results lend strong support to the competition hypothesis and only limited support to the segregation hypothesis. The findings further suggest that the structure of the economic periphery facilitates more intensive competition than in the core. Finally, we find that exclusion harms not only subordinates, but also some superordinates. Students of economic discrimination uniformly agree that exclusionary processes have detrimental consequences for the income of subordinate groups. Ethnic minorities and women are denied access to the lucrative, prestigious occupations and to the primary sector of the labor market, and thus, are overrepresented in low-paying jobs and in marginal industries (e.g., Bielby & Baron 1986; Bridges 1980; Kaufman 1984). At the heart of these processes is the Weberian notion of closure-the process by which *Work on this paper was partly supported by grant #14 from the Israel Foundation Trustees. We thank Yasmin Alkalai, Alisa Lewin, and Rivka Raijman for their assistance in data preparation and analysis, and two anonymous referees for helpful comments. Direct correspondence to Moshe Semyonov, Department of Sociology, Tel Aviv University, Ramat Aviv, 69978, Israel. o The University of North Carolina Press Social Forces, December 1989, 68(2):379-396