SHELTERED LABOR-MARKETS, PUBLIC-SECTOR EMPLOYMENT, AND SOCIOECONOMIC RETURNS TO EDUCATION OF ARABS IN ISRAEL

This study expands the theoretical discussion of ethnic economies by f ocusing on public sector employment and the role the state plays in af fecting the socioeconomic fortunes of ethnic minorities. The authors a rgue that under certain circumstances public sector employment helps e thnic minorities attain higher socioeconomic rewards. The findings of the study indicate that Arab employees in Israel receive higher return s to education in the ethnic labor market, compared with the dominant market, and in the public sector rather than the private sector. The l atter result also holds true when Arab workers are compared to Jews, r evealing the benefits derived from the sheltered labor market.