MAS Meeting Discusses Demographic Destruction and the Labor Market in the Gaza Strip: Community Adaptation in the Face of Collapse

Wednesday, 11 June 2025

The Palestine Economic Policy Research Institute (MAS) held its third roundtable of the year, titled “Community Adaptation — Systematic Demographic Destruction and Labor Market Dynamics in the Gaza Strip: Implications in Light of the October 2023 War,” with the participation of a group of specialists, practitioners, and interested stakeholders, both in person at the Institute’s headquarters and via Zoom.

The background paper was prepared by MAS researcher Fadi Daraghmeh with support from the Heinrich Böll Foundation-Palestine and Jordan. Remarks and discussant interventions were delivered by Ms. Abeer Al‑Mughraiby, Director of Planning at the General Directorate of Studies and Research at the Ministry of Labor, and Dr. Mazen Al‑Ajla, an economist from the Gaza Strip.

Research Coordinator Dr. Sameh Hallaq opened the session, stressing the importance of the paper, which seeks to study the multi‑faceted repercussions of the systematic demographic collapse in the Gaza Strip—marked by mass displacement and population loss, and the disintegration of family structures—on labor‑market performance. He expressed thanks to the Heinrich Böll Foundation — Palestine and Jordan Office for funding this event.

The MAS paper

The paper reveals that the war in Gaza has caused widespread disintegration of family and social structures due to mass displacement and the loss of a large number of breadwinners, leading to an increase in female‑headed households and a decline in family solidarity systems. The researcher noted that half a million people are in need of psychological support amid rising trauma, especially among children—most of whom have been displaced and some of whom have lost parental care entirely.

Daraghmeh explained that the thousands who have sustained permanent disabilities, along with the disruption of education for more than 800,000 children, threaten human capital and social cohesion. He warned of the disintegration of the labor market due to the loss of skilled workers and the halt to education and training, which increase the vulnerability of economic participation—especially among women and youth—and undermine prospects for sustainable recovery.

Comprehensive economic collapse and unemployment

The paper shows that the assault on Gaza has led to a comprehensive economic collapse: gross domestic product contracted by approximately 85% in just one year, and unemployment surged to more than 80% in 2024. Labor‑force participation fell to 36%, while the economic structure experienced near‑total paralysis amid severe damage to infrastructure and establishments, the collapse of supply chains, and liquidity shortages. At the same time, informality expanded as a survival mechanism, alongside the growth of child labor and deteriorating working conditions, all in the absence of social protection.

Education systems and vocational training were also severely affected due to the targeting of schools and universities and the killing of hundreds of educational staff. Data from 2024 indicate that the employment rate fell to only 9.3%, and about 74% of youth exited any educational or productive track. These indicators

reflect a structural crisis in the labor market that threatens human capital and undermines the chances of future economic recovery.

Summary and policy recommendations

The paper points to the need for urgent policy steps, beginning with reaching a permanent ceasefire to halt the destruction, followed by immediate reinforcement of humanitarian and economic assistance by international bodies. It calls for relief efforts to focus on securing food, cash transfers, and fuel, with fair distribution, and on supporting bakery networks and community kitchens.

The paper calls for urgent intervention by international agencies and donors to finance emergency employment programs and support small and medium‑sized enterprises to inject liquidity and revive the local economy. It recommends restarting vital industries, supporting farmers and fishers, and rehabilitating markets and infrastructure. It stresses the importance of flexible funding for NGOs and community organizations to expand programs such as cash‑for‑work, skills training, and psychosocial support.

The paper also emphasizes the need for effective partnerships to ensure that assistance reaches the most affected groups, investment in multi‑service youth centers, and the protection of vulnerable groups. Finally, it calls for a long‑term commitment to the reconstruction of Gaza, in coordination with Palestinian authorities, in a way that enhances economic capacity and recognizes the resilience and self‑help initiatives of the population.

Ms. Al‑Mughraiby noted that the reshaping of the labor market is occurring in a fundamental way as a result of the war, requiring a response that aligns with a comprehensive development vision and does not rely on emergency interventions alone. She pointed out that roughly 50% of economic establishments have been totally or partially destroyed, producing deep structural shifts in the labor market, especially with the weakening of small and medium‑sized enterprises—some of which have collapsed entirely. She added that the government responded by providing direct support to workers and cash and in‑kind assistance, alongside efforts to rehabilitate damaged establishments and finance small projects.

Prominent recovery proposals include providing dedicated reconstruction grants tied to targets for local job creation; expanding social protection networks; supporting small enterprises—especially those led by women; and establishing national employment funds that help stimulate the economy and provide sustainable job opportunities.

For his part, economist Al‑Ajla said that understanding what is happening in the Gaza Strip requires looking at three central dimensions: the ideological outlook linked to ethnic cleansing, the Zionist demographic preoccupation, and the youthful demographic structure that characterizes Gazan society. He considered this “young human element” to be the primary target in this war.

Al‑Ajla explained that the Israeli assault has systematically worked to destroy infrastructure, warning of the dangerous effects of future demographic changes and the spread of informal jobs and a burgeoning black market as a result of the economic collapse. Regarding adaptation mechanisms, he stressed that “what is happening in Gaza cannot be described as conventional resilience, but rather a confrontation with a harsh reality with the bare minimum of options.” He called for urgent short‑term action—an immediate end to the assault, the entry of humanitarian aid, and addressing the liquidity crisis—and pointed to the importance of medium‑term plans based on in‑depth studies of the economic and social reality to build sustainable responses.

Participants agreed on the severity of the demographic destruction, the importance of rebuilding educational and health institutions, and the need to combine immediate humanitarian response with a sustainable developmental vision—focusing on financing small projects and protecting vulnerable groups.