The Economics of the Arab Sector in Israel

Eran Yashiv, The Eitan Berglas School of Economics, Tel Aviv University. Nitsa (Kaliner) Kasir, The haredi institute for public affairs. The study will soon be published in the book 'Lights and Shadows in Israel's Market Economy 1995 – 2015' Falk Institute, Hebrew University (Avi Ben Basat, Reuven Granau & Asaf Zusman).

The paper surveys the current state of the Arab economy in Israel. First, it documents key facts, including government policy plans. It then presents a dynamic equilibrium model of human capital and labor market barriers faced by the Israeli Arabs. Both the descriptive statistics and the empirical implementation of the model show that there are still significant gaps in economic performance between Jews and Arabs in Israel, despite some narrowing of the gaps over time. In particular, Arab men are concentrated in low-skill, low-wage jobs and Arab women’s labor force participation is relatively low.

 

English variations of the study have been published as a DPS (DISCUSSION PAPER SERIES) in various places:
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Nitsa (Kaliner) Kasir
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