The Palestinian Economy. Theoretical and Practical Challenges

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Proceedings “The Palestinian Economy: Theoretical and Practical Challenges” 329 labour while all other variables maintain their sign and significance. The magnitude of the effect of closures is slightly reduced but still highly significant. In Column 2, we estimate the same specification as in Column 1 but we also include the households from Jerusalem Est in our estimation sample. 10 As expected, both the coefficient of the number of closure days and the interaction between distance and closures increases their significance. Finally, in regression (3) we estimate our preferred specification including a number of additional household control variables. These are the number of siblings 10-14 and 15-17 years old in the household, the ratio of female children in the household, the household size and the place of living of the household (rural, urban, or refugee camp). 11 The results confirm also in this case the positive and significant effect of the number of closure days on child labour. In addition, this specification shows that, even if the coefficient is only marginally significant, the number of closure days decreases the probability of school attendance. Yet the sign of the interaction term indicates that effect is reduced for household living further from the border. We also perform a series of other robustness checks (results not reported). 12 To take into account the observation in Moulton (1990), we considered alternative ways of correcting standard errors. While in our main estimation we used robust errors, as robustness checks we clustered errors around the district market wage, district unemployment and household income. Results do not change. We also considered alternative econometric models. First, we consider the case in which work and school attendance decision are assumed to be independent. To this end we run two separated probit regressions -one for child labour and one for school attendance, in which we also included household fixed effects. This is a particularly important robustness check, since the inclusion of time, district and household fixed effects rule out a number of possible omitted variable issues. While point estimates are slightly different from the ones obtained with our model – since the probit model does not account for the trade-off between the two outcomes results confirm the significant effect of closure days in increasing child labour. Results do not change even including school attendance (child labour) as control variables in the child labour (school attendance) probit regression. Finally, we also estimated a tobit model for 10 East Jerusalem was annexed by Israel in 1967. Despite the annexation, East Jerusalem is considered an important commercial and cultural center that serves Palestinians living in the rest of the West Bank. The Palestinians living in that area have a rather peculiar status with respect to the ones in other districts in West Bank. While Palestinians living in East Jerusalem do not carry an Israeli nationality, they do not need a work permit to commute to Israel. 11 Note that these variables are all likely to be exogenous to child’s status. 12 Detailed results are available upon request
330 Di Maio – Nandi the hours of child work, for the (smaller) sample for which this information is available. We find that the number of closure days increases the number of hours worked. Table 5: The effect of closure days on child labour and school attendance in West Bank: robustness checks number closure days Child labour (1) (2) (3) School attendance Child labour School attendance Child labour School attendance 0.004** -0.002 0.004*** -0.002 0.004** -0.003* (0.002) (.002) (0.002) (0.001) (0.002) (0.002) number closure days x -0.000* 0.000* -0.000** 0.000* -0.000* 0.000* distance (0.000) (0.000) (0.000) (0.000) (0.002) (0.002) age father education mother education summer 0.204*** -0.192*** 0.204*** -0.194*** 0.205*** -0.194*** (0.010) (0.013) (0.010) (0.013) (0.002) (0.002) -0.009** 0.043*** -0.009** 0.043*** -0.011** 0.043*** (0.004) (0.005) (0.004) (.005) (0.002) (0.002) -0.021*** 0.03*** -0.021*** 0.032*** -0.023*** 0.034*** (0.004) (0.004) (0.004) (0.004) (0.002) (0.002) 0.251*** 0.053 0.247*** 0.053 0.257*** 0.054 (0.031) (0.039) (0.031) (0.039) (0.002) (0.002) household children gender 0.015 -0.063 ratio (0.060) (0.069) household no.children 10-14 household no.children 15-17 household size urbana rurala constant 0.114*** -0.036* (0.017) (0.020) 0.011 0.018 (0.020) (0.023) -0.020** 0.006 (0.008) (0.009) 0.198*** 0.092 (0.058) (0.057) 0.221*** 0.178*** (0.056) (0.053) -3.999*** 3.755*** -4.006*** 3.753*** -4.329*** 3.668*** (0.159) (0.190) (0.159) (0.190) (0.175) (0.205) Observations 41,789 42,934 41,789 F-test 0.000 0.000 0.000 P -0.484 -0.482 -0.487 (0.21) (0.21) (0.21) Note: Results for the biprobit model described by equations (1) and (2). ***, **, * stand for significant at 1%, 5% and 10% level, respectively. Weights used. Standard errors (in parenthesis) are robust. Year and district fixed effects are included in all regressions. (a) the reference category is refugee camp.
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The Palestinian Economy Theoretical
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© Gianni Vaggi - Marco Missaglia -
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VOLUME II
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246 Zagha 1. Introduction The local
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248 Zagha and groups in political d
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250 Zagha drawbacks in the politica
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252 Zagha it is not surprising that
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254 Zagha economy (including expend
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256 Zagha social norms sharply dist
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258 Zagha Bird (1995) puts it, info
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260 Zagha intergovernmental fiscal
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262 Zagha low rate flat tax levied
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264 Zagha need to be given access t
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266 Zagha Such failures are found i
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268 Zagha 4.1.3. The Relationship b
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270 Zagha a final account report of
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272 Zagha 4.1.6. Functions of LGUs
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274 Zagha • Management of LGU ass
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276 Zagha Figure 2: Local Governmen
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424 Olivera provisions - in particu
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426 Olivera Figure 1: Economic Grow
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428 Olivera 3. Traditional economic
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430 Olivera costs and lower market
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