The Palestinian Economy. Theoretical and Practical Challenges

314
Di Maio – Nandi
1. Introduction
The existence of child labour naturally raises a number of ethical, social and economic
issues. While the dimension of the phenomenon is well known, there is still no
consensus concerning its main determinants. This is not surprising considering that – as
recent research indicates – child labour is a more varied, country and context-specific
phenomenon than usually believed. This paper contributes to the literature on the
determinants of child labour and school attendance examining the effect of a conflict on
child’s status.
Most of the literature on the economic impact of conflicts looks at their aggregate
effects (Abadie and Gardeazabal 2003; Miguel and Roland 2006) while only recently
microeconomic analysis are becoming available (see for instance Blatmann and Annan,
2010). The number of papers analysing the effect of a conflict on children is even
smaller. Most of them focus on the effect of conflict on school attendance or
achievement (see for instance Shemyakina, 2006; Akresh and de Walque, 2010) but
they do not consider child labour.
The Palestinian Territories are a unique setting to study the microeconomic effect of
a conflict given their peculiar historical and economic features. Starting from the Six-Day
War in 1967, West Bank and the Gaza Strip have been occupied by Israel. Since then,
periods of conflict of different intensity followed one after another. After a decade of
(relative) amelioration of the economic and political situation during the 90’s, the
situation had dramatically worsened since the beginning of Al-Aqsa Intifada (also
called second Intifada, September 2000). In response to re-surge of the conflict, Israel
started increasingly imposing on Palestinians a number of mobility restrictions through
different security measures: closures of borders, curfews and sieges. In particular, the
military decision to impose the daily closure of borders made impossible for Palestinian
workers employed in Israel to reach their workplaces. 1 Given that those represent a
relevant share of Palestinian workers, closures turned out to strongly affect the whole
Palestinian economy.
In this paper we analyze the effect of closures on child labour and school attendance
of Palestinian children 10-14 in West Bank between the beginning of the Second Intifada
and the end of 2006. There are different reasons for which the conflict may affect
1 Closure consists of banning the movement of labour and goods between the Occupied Territories and Israel,
as well as between, and within, the West Bank and the Gaza Strip.