Chapter 2
Labour-force participation, under-utilization of labour and employment patterns

This chapter focuses on the employment situation of Palestinians living in Gaza and the West Bank refugee camps after the March 1993 Israeli border closure. It is our hypothesis that there has been a dramatic reduction in employment since the closure. Thus we seek to develop indicators which can measure this reduction, and help us to understand how it has manifested itself in various socio-economic groups.

The chapter is divided into four parts. The first part will discuss various aspects of labour-force participation crude labour-force participation rates, determinants of labour-force participation and the composition of the labour force.

The second part will document the effects of the border closure on the employment situation for various socio-economic groups, with a focus on the under-utilization of labour.

The third part deals with changes in individuals' employment situation and workplace from 1992 to 1993. We will also discuss the situation of employed persons, their workplace, type of work and the economic sectors in which they are found. A special section concerning individual involvement in household income-generating activities, has also been included.

The concluding part of the chapter will discuss scenarios for future labour supply in Gaza on the basis of results from the present data set. We also present alternative projections from the Work Force and Labour Modules of the World Bank's macro-economic model for the Occupied Territories.

In family-based Palestinian society, decisions on income-generating activities are usually seen as household rather than individual matters. A person's labour activities may thus be viewed as a result of household optimization strategies, rather than individual strategies unconstrained by the household. Why then, have we chosen to focus on the labour activities of individuals? There are two reasons for this: 1) it is the individual who is actually employed, and 2) the household may be treated as a set of contextual variables.

The economic importance of labour for the household, and its role in household coping strategies, are left for the subsequent chapter. Each adult individual in the sample will consequently be treated as a separate case, even though the labour activities of individual household members may be expected to be highly inter-related.


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