Hard traveling: Unemployment and road infrastructure in the shadow of political conflict

Abstract

If political circumstances are an important cause of unemployment in the Middle East, does this tend to attenuate the influence of economic infrastructure? I approach this question by building a geospatial dataset of the West Bank, an area with high unemployment arguably linked to political problems. I find Israeli army road obstacles, deployed during the Second Intifada, obstructed peri-urban Palestinian commuters from accessing commercial centers and border crossings, inflicting employment losses that were substantially offset by employment gains among their more centrally located Palestinian competitors. The findings suggest that marginal economic interventions, such as removing obstacles or paving roads, have a good chance of altering the spatial distribution of unemployment, but may struggle to reduce overall unemployment levels absent political reform.