SHORT-RUN DEMAND FOR PALESTINIAN LABOR

Palestinian residents of the West Bank and Gaza Strip who work in Isra el generally earn more than Palestinians employed locally, but this wa ge premium is highly volatile. Beginning with the 1987 Palestinian upr ising, changes in wage differentials by work location parallel Palesti nian absences from work in Israel. This article interprets changing lo cation differentials in response to exogenous shocks as movements alon g an Israeli demand curve for migrant workers. Estimates of a model of the West Bank and Gaza Strip labor market are used to evaluate the ef fect of policies governing Palestinian access to the Israeli labor mar ket.