The Palestinian Economy. Theoretical and Practical Challenges

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Di Maio – Nandi
Figure 1: Number of closure days (quarterly) between the beginning of the
Al-Aqsa Intifada and 2006, (2000:Q4-2006:Q4)
Note: Quarterly number of effective closure days.
Source: Palestinian Ministry of Labour.
In our analysis, we use the quarterly number of closure days to capture the effect of the
conflict on our dependent variables (child labour and school attendance). For our
estimation strategy to be valid, the number of closure days has to be exogenous with
respect to the evolution of the labour market in West Bank. We now present some
suggestive evidence that corroborates this hypothesis. As a first piece of evidence, we
show that the number of closure days is not systematic across quarters. In Figure 2, we
plot the number of closure days against the number of closure days in the previous quarter.
The data show that the short-term change in the number of closure days is random.