The Labor Market Impact of Mobility Restrictions : Evidence from the West Bank

Using data on Israeli closures inside the West Bank, this paper provides new evidence on the labor market effects of conflict-induced restrictions to mobility. To identify the effects, the analysis exploits the fact that the placement of physical barriers by Israel was exogenous to local labor market conditions and uses a measure of conflict intensity to control for the likely spurious correlation between local unrest, labor market conditions, and the placement of barriers. The study finds that these barriers to mobility have a significant negative effect on employment, wages, and days worked per month. The barriers had a positive impact on the number of hours per working day. These effects are driven mainly by checkpoints while other barriers, such as roadblocks and earth mounds, have a much more limited impact. Only a tiny portion of the effects is due to direct restrictions on workers' mobility, suggesting that these restrictions affect the labor market mainly by depressing firms' production and labor demand. Despite being an underestimation of the actual effects, the overall costs of the barriers on the West Bank labor market are substantial: in 2007, for example, these costs amounted to 6 percent of gross domestic product. Most of these costs are due to lower wages, thus suggesting that the labor market has adjusted to the restrictions more through prices than quantities.

Bibliographic Details

Main Authors:	Cali, Massimiliano, Miaari, Sami H.
Language:	English en_US
Published:	World Bank, Washington, DC 2013-05
Subjects:	ACCESSIBILITY, ACCESSIBILITY TO EMPLOYMENT, ACCOUNTING, ALTERNATIVE ROUTES, BANK OF ISRAEL, CAPITAL INVESTMENTS, CHILD LABOR, COMMUTERS, CONGESTION, CROSSING, DEMAND CURVE, DEVELOPMENT ECONOMICS, DISTRIBUTION OF INCOME, DOMESTIC MARKET, DRIVING, ECONOMIC CONDITIONS, ECONOMIC COSTS, ECONOMIC EFFECTS, ECONOMIC GROWTH, ECONOMIES OF SCALE, EMPLOYMENT, EMPLOYMENT LEVELS, EMPLOYMENT OPPORTUNITIES, EMPLOYMENT PROBABILITY, EMPLOYMENT RATES, EMPLOYMENT STATUS, ESTIMATED PROBABILITIES, FATALITIES, FATALITY, FINDING EMPLOYMENT, FIRM LEVEL, FIXED COSTS, FOREIGN WORKERS, GENERAL EQUILIBRIUM, GROSS DOMESTIC PRODUCT, HIGHWAY, HIGHWAY CONSTRUCTION, HIGHWAY SYSTEM, HIGHWAYS, HUMAN CAPITAL, HUMAN RESOURCES, INFRASTRUCTURE DEVELOPMENT, INFRASTRUCTURE PROJECTS, INFRASTRUCTURES, INTERNATIONAL TRADE, INTERSTATE HIGHWAY SYSTEM, JOB SEPARATION, JOBS, LABOR ADJUSTMENT, LABOR DEMAND, LABOR ECONOMICS, LABOR FORCE, LABOR MARKET, LABOR MARKET CHARACTERISTICS, LABOR MARKET IMPACT, LABOR MARKET OUTCOME, LABOR MARKET OUTCOMES, LABOR MARKET VARIABLES, LABOR MARKETS, LABOR SUPPLY, LABOUR, LABOUR SUPPLY, LOCAL LABOR MARKET, LOCAL LABOR MARKET CONDITIONS, LOCAL LABOR MARKETS, LORRIES, METROPOLITAN AREAS, MOBILITY, MOTIVATION, OCCUPATION, PEDESTRIAN, PEDESTRIAN TRAFFIC, PRELIMINARY EVIDENCE, PRICE DIFFERENTIALS, PRODUCTIVITY, PROFITABILITY, RAILROAD, RAILROADS, RAILWAY, RAILWAY SYSTEM, REAL INCOME, ROAD IMPROVEMENTS, ROAD NETWORK, ROAD SYSTEM, ROADS, ROUTE, ROUTES, SALES, SPREAD, TOTAL WORKERS, TRANSACTION COSTS, TRANSIT, TRANSPORT, TRANSPORT COSTS, TRANSPORT INFRASTRUCTURE, TRANSPORT MODE, TRANSPORT SECTOR, TRANSPORTATION, TRANSPORTATION INFRASTRUCTURE, TRAVEL TIME, TRUE, UNEMPLOYED, UNEMPLOYED WORKER, UNEMPLOYED WORKERS, UNEMPLOYMENT, UNEMPLOYMENT RATE, UNSKILLED WORKERS, VEHICLE, VEHICLES, WAGE ADJUSTMENT, WAGE DIFFERENTIAL, WAGES, WORKER, WORKERS, WORKING HOURS,
Online Access:	http://documents.worldbank.org/curated/en/2013/05/17743937/labor-market-impact-mobility-restrictions-evidence-west-bank https://hdl.handle.net/10986/15595
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