Assessing Labor Market Performance in the West Bank during the War on Gaza

This study is part of a broader research project that seeks to assess the social and economic repercussions of the war on the Gaza Strip and the West Bank. It aims to explore possible  pathways for recovery and put forward potential development policies. More specifically, the study focuses on the labor market in the West Bank. The study examines the repercussions of the economic devastation caused by the 2023 war on the local labor market. It analyzes the extent to which key labor market indicators have been affected by the shock of the war, including employment, unemployment, changes in working hours, and wages. 

The study comprises two main chapters. The first examines the restrictive policies and practices imposed by Israel on the West Bank since the onset of the war, which have directly and indirectly affected economic performance and the labor market in the West Bank. Among the most prominent of these measures are the repeated military incursions carried out by the Israeli occupation, particularly in the northern West Bank, coupled with the imposition of severe restrictions on the movement of people and goods. These restrictions have been enforced through the establishment of hundreds of checkpoints, roadblocks, and gates, effectively fragmenting and isolating Palestinian communities from one another. 

In addition, the Israeli government has largely banned access to the Israeli labor market, with significant repercussions for the Palestinian labor market through two main channels: First, there has been a decline in the compensation earned by workers employed in Israel, negatively impacting domestic demand and consumption levels. Second, many laid-off workers have been compelled to compete with West Bank workers for the limited jobs available locally. Moreover, these measures have been compounded by intensified financial pressure on the PA, as Israel has imposed arbitrary and unlawful deductions from clearance revenues. This has led to a noticeable decline in these revenues and weakened the government’s capacity to meet
its obligations toward public employees, suppliers, and vulnerable households. 

In the second chapter, the author provides a comprehensive and detailed analysis of the changes in employment, unemployment rates, and labor force participation in the West Bank after seven quarters since the onset of the latest war on the Gaza Strip.