The Palestinian Economy. Theoretical and Practical Challenges

Proceedings “The Palestinian Economy: Theoretical and Practical Challenges” 321
Figure 2: Number of closure days (quarterly) against closure days in
the previous quarter (2000:Q4-2006:Q4)
Source: Palestinian Ministry of Labour.
As an additional check, in order to exclude that the number of closure days is
determined by the labour market conditions in West Bank, we regress the number of
closure days in a given quarter on a set of labour market indicators referring to the
previous period. The results are reported in Table 1. In regression (1) to (4) we
separately regress the number of closure days on the average wage in WB, the rate of
unemployment in WB, the low-skilled wage in WB and number of closures days in the
previous period. In regressions (5) to (7) we progressively include all these variables.
The results show that the number of closure days in a quarter is not influenced by the
previous period average wage, rate of unemployment, average low skilled wage or by
the number of closures in the previous quarter. In all regressions, the coefficients of
these variables are not significantly different from zero.
These results confirm the view expressed in Miaari and Sauer (2010) that the
decision of (temporary) closing the borders between Israel and the West Bank is not
related to the evolution of Palestinian labour market or to the economic situation in the