Labor Market Regulations and Unemployment Duration in Palestine

Abstract Understanding the nature of unemployment has been a key research goal for economists since the inception of modern macroeconomics. One key feature of unemployment is that the social impact of unemployment differs depending on the duration of unemployment spells. However, the very policies that were created to protect workers from the harm associated with unemployment were found to lengthen the duration of unemployment. While unemployment has generally been recognized as an important issue in the Arab countries of the Middle East, very little research has been done on unemployment duration. This paper examines the basic coverage rates of the main form of social protection for Palestinian workers: the Palestinian Labor Law of 2000. We then examine the impact of this law on men and women separately, with a special focus on the impact of maternity benefits on women’s unemployment duration. This paper finds that the services sector receives substantially more benefits than any other sector, and that service sectors workers are the slowest to find work after becoming unemployed. Arabic Abstract: