The Palestinian Economy. Theoretical and Practical Challenges

316
Di Maio – Nandi
the Israeli-Palestinian conflict that are not usually accounted for in evaluating the effects
of this military measure implemented by the Israeli Army.
The paper is structured as follows. The next section reviews three strands of
literature that are related to our paper. Section 3 presents the estimation strategy and the
econometric model. Section 4 describes the dataset and the characteristics of child labour
and school attendance in West Bank. Section 5 presents the estimation results and a
number of robustness checks. Section 6 concludes the paper.
2. Literature
Our paper is closely related to the growing literature on the impact of negative shocks on
both child labour and school attendance. Among the shocks considered in the literature
there are: the decline in crop income (Jacoby and Skoufias 1997; Beegle et al. 2006), the
job loss of the household head (Parker and Skoufias 2005; Duryea et al. 2007) and a
variety of natural disasters (Guarcello et al. 2010). While the magnitudes of the estimated
effects differ across studies, in general results indicate that a negative shock increases the
probability of child labour and decreases school attendance. Some other papers have
analyzed the impact of macroeconomic shocks and political instability on children’s
status (see for instance Lim 2000; Skoufias and Parker 2001). Duryea and Arends-
Kuenning (2003) document that during the years of economic crisis, the substitution
effect (i.e. child labour increases with the market wage) is reduced while the effect of
household income on the probability of child labour and schooling does not change.
Actually the exposure to a violent conflict can be considered as another type of negative
shock affecting the household and the child. Most of research on the impact of conflict on
children concerns how it affects school attendance or attainment. 2 The received empirical
evidence on the effect of armed conflict on children’s schooling is mixed. Some studies
find that conflicts have small impacts on the outcomes of interest (for instance Chen et al.
2008). Others tend to find long-term negative effects of violent conflict on school
attendance, school attainment and also school drop-out (inter alia Akresh and de Walque
2010, for Rwanda; Chamarbagwala and Morn 2010 for Guatemala; Leon 2009 for Peru;
Shemyakina 2006 for Tajikistan; Swee 2009 for Bosnia and Herzegovia). As far as we
2 The paper of Estevan and Baland (2007) provides a model that links exposure to a conflict (mortality risk)
with household choice concerning schooling and child labour.