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Decomposing Wage Gaps between Ethnic Groups: The Case of Israel

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  • Gad Levanon
  • Yaron Raviv

Abstract

Past investigations of the income gaps between Jews and non‐Jews in Israel treat non‐Jews as one group. In this paper we separate the non‐Jewish group into three main religious minorities: Muslims, Christians, and Druze and focus on the northern part of Israel, where most minorities live. Using the latest Israeli census, we find significant explained and unexplained income gaps in favor of Jews. The unexplained gaps tend to be larger the more educated the individual. Jews have much higher representation in the more lucrative occupations, and earn significantly more in them. Muslims generally suffer from the largest income gaps, while Druze have the lowest income gaps, reflecting direct and indirect benefits reaped from serving in the army. Among minorities, Christians are the most educated and most concentrated in the top occupations, which explains why they have the lowest gaps in the highest percentiles of the income distribution.

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  • Gad Levanon & Yaron Raviv, 2007. "Decomposing Wage Gaps between Ethnic Groups: The Case of Israel," Southern Economic Journal, John Wiley & Sons, vol. 73(4), pages 1066-1087, April.
    • Handle: RePEc:wly:soecon:v:73:y:2007:i:4:p:1066-1087
    DOI: 10.1002/j.2325-8012.2007.tb00818.x
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    References listed on IDEAS

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    1. Klinov, Ruth, 1996. "Changes in school enrollment patterns in Israel: A comparison between two disadvantaged groups," Economics of Education Review, Elsevier, vol. 15(3), pages 289-301, June.
    2. Neuman, Shoshana & Silber, Jacques G, 1996. "Wage Discrimination across Ethnic Groups: Evidence from Israel," Economic Inquiry, Western Economic Association International, vol. 34(4), pages 648-661, October.
    3. Cotton, Jeremiah, 1988. "On the Decomposition of Wage Differentials," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 236-243, May.
    4. Reimers, Cordelia W, 1983. "Labor Market Discrimination against Hispanic and Black Men," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 570-579, November.
    5. Roger Koenker & Kevin F. Hallock, 2001. "Quantile Regression," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 143-156, Fall.
    6. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
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