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On decomposing the changes in wage inequality in palestine over time

Author

Listed:
  • Hatem Jemmali

    (University of Manouba)

  • Rabeh Morrar

    (An-Najah National University)

  • Fernando Rios-Avila

    (Levy Economics Institute of Bard College, Annandale-on-Hudson)

Abstract

This paper examines the changes in wage inequality over the period 2009-16 in Palestine's labor market. The wage inequality, assessed by the Gini coefficient, the bottom and upper quintiles, and the middle inter-quintiles, is found to be in an increasing trend over years. Using an intertemporal decomposition approach, we decompose the changes in wage inequality into a composition effect explained by changes in demographic and labor market characteristics, and a wage structure effect attributable to unequal returns to those characteristics. We find evidence that the composition effect – explained by changes in industry composition, region, and refugee status – dominates the wage structure effect in explaining the rise of wage inequality over the first two years. Instead, the results indicate that the wage structure effect of age and discrimination against female workers has a significant and positive contribution to the increase of the Gini coefficient and the upper quintile over the remaining years of the period.

Suggested Citation

  • Hatem Jemmali & Rabeh Morrar & Fernando Rios-Avila, 2022. "On decomposing the changes in wage inequality in palestine over time," Working Papers 1620, Economic Research Forum, revised 20 Dec 2022.
    • Handle: RePEc:erg:wpaper:1620
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