DP15151 The Economic Outcomes of an Ethnic Minority: the Role of Barriers
|Author(s):||Nitsa Kasir (Kaliner), Eran Yashiv|
|Publication Date:||August 2020|
|Keyword(s):||ethnic minority, human capital barriers, labor market barriers, occupational choice|
|Programme Areas:||Labour Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=15151|
The Arab population in Israel constitutes an ethnic minority, at around 20% of the population. The economy of this minority is characterized by inferior outcomes relative to the Jewish majority by all indicators, including employment, wages, occupational status, social welfare, education, and housing. This paper reviews key data facts and presents a model of barriers to integration facing Arabs in Israel, taking it to the data. The empirical analysis, based on a general equilibrium model of occupational choice with optimizing agents and barriers, points to an increase over time in barriers to the acquisition of human capital in highly skilled occupations, and, concurrently, a reduction in labor market barriers in all occupations. The analysis offers insights relevant to other developed economies with large ethnic minorities.