Doctoral Dissertation Research: An Investigation into Labor Market Responses to External and Regional Shocks

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This research will investigate how labor demand and supply shocks affect wage inequality and employment patterns. Specifically, external shocks manifested in trade and migration, regional shocks from changing of political structure, and localized shocks from government employment programs will be investigated in order to address the following questions. First, how do changes in trade and migration flows affect the returns to skill? Second, how do changes in political structure affect the regional distribution of employment? Finally, can a government employment program mitigate the effects of external shocks and reduce wage inequality? In order to address these questions, this research will use household labor force surveys from the West Bank and Gaza Strip from 1981-1996 and a variety of supplemental data sources in order to estimate the effects of these changes in labor demand and supply on the returns to different types of workers. The variety and severity of the shocks to the economies in the West Bank and Gaza Strip will allow this research to investigate these issues in ways not possible when using data from the US or other countries. Because of the uniqueness of these data, this research will be able to simultaneously test competing theories of the source of wage inequality, which has not yet been done using US data.