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Jerash for Research and Studies Journal مجلة جرش للبحوث والدراسات

Jerash for Research and Studies Journal مجلة جرش للبحوث والدراسات

Abstract

This study estimated employment elasticities in the Palestinian Territories, between 1970-‎‎1993, at the aggregate and the sectoral levels by using regression analysis. It was found that ‎the demand for labor within Palestinian Territories was influenced by the volume of ‎production, labor cost, and employment during the previous period, however, the degree of ‎influenced differed from one economic sector to another, and between the West Bank and ‎Gaza Strip. This, therefore, requires attention when it comes to the drawing up of economic ‎policies to encourage employment. Also, it was found that employment elasticity with respect ‎to output was relatively low which indicates a weak labor absorptive capacity of the Palestinian ‎economy. Indeed, increasing employment by 5 % in the West‏ ‏Bank requires a growth of 20 % ‎in real GDP, a rate that is quite high. The same can be said about policies that aim at increasing, ‎employment through reduction of labor cost. The effect of such policies will be minimal on ‎employment in the Palestinian Territories owing to the low elasticity of employment with ‎respect to wages

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