The Persistent Wage Gaps between Palestinians and Jews in Israel, 1997–2009

Israel is a deeply divided society comprising different ethnic, national, and religious groups. The socioeconomic status of each of these groups is characterized by both diversity and polarization. At one end, at a low socioeconomic status, lie most of the Palestinians, and at the other end lie the Jews, mainly those with Western background, who enjoy a high socioeconomic status that even wealthy Palestinians have not managed to achieve. Palestinian citizens tend to face harsh conditions and discrimination in the public domain, including the labor market. In the labor market, this discrimination (ethnic penalty) is manifested in lower rates of employment participation, higher unemployment rate, limited access to the most prestigious occupations of managerial and professional jobs, and low income relative to the Jewish majority. In this study we focus on the ethnic penalty in wage income, and examine its dynamic from 1997 to 2009.