Page 228 - Contributed Paper Session (CPS) - Volume 1

CPS1284 Rabeh M.

Refugees in labor market: Do they act as a
marginalisation tool? A decomposition of the
wage gap in Palestine
1,2
Rabeh Morrar
1 An-Najah National University, Palestine
2 Northumbria University, UK

Abstract
Given the importance of equal opportunities for poverty reduction, inclusive
development and the integration of refugees, we will use the data from the
more recent Palestinian Labor Force Survey (PLFS) conducted in the West Bank
and Gaza Strip in 2016 to examine, the structure and the level of the income
inequality including an empirical decomposition (Oaxaca–Blinder
Decomposition) of the refugee and non-refugee disparities. For the
decomposition of this inequality, we will use the quantile decomposition
approach, based on the Recentered Influence Function (RIF) regression,
recently proposed by Firpo, Fortin, and Lemieux (2009). This approach allows
us to examine the main origins of the observed inequalities among the
population subgroups (refugees and residents) taking into consideration a
group of demographical variables (gender, education, place of living, age,
etc.). It investigates more specifically how the disparities in the distribution of
household features and in the returns to these features contribute to this
inequality. This would undoubtedly shed more light on the role and
effectiveness of current development and integration policies conducted by
the authorities and others institutions in favor of the refugees. The study found
non-refugees earn 17% more wages than their refugees counterparts. The
composition effect explained by differences in productivity characteristics
presents 8.01% of the mean wage gap, while the discrimination effect explains
about 9% of the mean wage gap, so the highest percentage of wage
differential is due to discrimination effects. The quantile decomposition
reveals that the wage differentials are found to be much larger at higher and
lower deciles than at the middle part of wage distribution. Also, the only
composition effect is found to drive the overall wage gap at the first quantile;
no significant effect of the discrimination part is observed at this part of
distribution.

Keywords
Oaxaca–Blinder Decomposition; RIF-OLS regressions; Inequality; Refugee;
Palestine

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