Abstract:
Two interesting facts emerge from the Palestinian labour market. Educational attainment for
women swiftly expanded during the 1999–2011 period, but the labour force participation rate for educated
women stagnated––disproportionately so for young educated women. We investigate whether changes in labour
demand has contributed to women’s sluggish labour force participation. Our empirical analysis used quarterly
labour-force data published by Palestine Central Bureau of Statistics between 2005 and 2011. To explore the
causal effect of labour demand shocks, we use Bartik instrumental variable approach. Our analysis provides
evidence that changes in the labour demand for educated women, rather than improvement in overall demand,
affect their labour force participation. This research has important policy implications regarding the economic
empowerment of educated women in Palestine suggesting that improvement in overall demand may not benefit
educated women and that boosting demand for this specific cohort is what matters.
