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Decomposing Wage Gaps Between Ethnic Groups: The Case of Israel

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  • Gad Levanon

    (Princeton University)

  • Yaron Raviv

    (Princeton University)

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. In almost every dimension Muslims suffer from the largest income gaps. Druze, on the other hand, enjoy the lowest income gaps across most of the income distribution, due in large part to direct and indirect benefits they reap from serving in the army. Among minorities, Christians are the most educated and most concentrated in the top occupations, which explains why they enjoy the lowest gaps in the highest percentiles of the income distribution.

Suggested Citation

  • Gad Levanon & Yaron Raviv, 2003. "Decomposing Wage Gaps Between Ethnic Groups: The Case of Israel," Working Papers 855, Princeton University, Department of Economics, Industrial Relations Section..
    • Handle: RePEc:pri:indrel:476
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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. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, 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. Roger Koenker & Kevin F. Hallock, 2001. "Quantile Regression," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 143-156, Fall.
    5. David Neumark, 1988. "Employers' Discriminatory Behavior and the Estimation of Wage Discrimination," Journal of Human Resources, University of Wisconsin Press, vol. 23(3), pages 279-295.
    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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    Cited by:

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    2. Muhammad Asali, 2008. "Wage Differentials in Israel: Endowments, Occupational Segregation, Discrimination, and Selectivity," Working Papers 011-08, International School of Economics at TSU, Tbilisi, Republic of Georgia.
    3. Marisa Bucheli & Rafael Porzecanski, 2008. "Racial Inequality in the Uruguayan Labor Market:An analysis of wage differentials between Afrodescendants and whites," Documentos de Trabajo (working papers) 1508, Department of Economics - dECON.

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    More about this item

    Keywords

    minorities; discrimination; wage structure;
    All these keywords.

    JEL classification:

    • P42 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Productive Enterprises; Factor and Product Markets; Prices
    • P43 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Finance; Public Finance
    • P44 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - National Income, Product, and Expenditure; Money; Inflation

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