The Welfare State as an Employer: An Unacknowledged Avenue of Opportunity for Palestinian Women in Israel

Abstract

Using almost three decades of data from large annual surveys, we show that jobs in education, health and other social services have fueled most of the growth in the labor force participation of Palestinian-Arab women in Israel since the late 1980s. Expansion of social services to Arab communities has offset the shortage of other local opportunities, without introducing competition from Jews. Analysis of hourly wages reveals that unlike their Jewish counterparts, comparably qualified Arab women earn substantially more if employed in the social services than in other branches. Moreover, inside the social services women of both nationalities with similar education and occupations receive similar earnings (although a gap has recently appeared in favor of Jews). Thus, in its role as an employer the welfare state in Israel has effectively taken on functions usually ascribed to active labor market policies and affirmative action, without ever intending to do so.