Does Palestinian Labor Law Hurt Employment Possibilities for Palestinian Youth?
Edward Sayre and Mary Kraetsch
April 2011
The Palestinian Authority introduced the Palestinian Labor Law of 2000 to unify, clarify and simplify the regulatory framework surrounding employment in the West Bank and Gaza. Implementation of the Palestinian Labor Law could have lowered the costs of employing young workers in the Palestinian Territories. However, key components of the law, such as the increase in severance payments to dismissed workers, have introduced additional costs for employers seeking to hire and dismiss workers; in turn, firms have been less willing to hire young workers. As a result, youth in the Palestinian Territories now experience increasingly prolonged school-to-work transitions.
This policy outlook considers the implications of the Palestinian Labor Law on unemployment duration for young Palestinians in the labor market, and suggests alternative choices for policy makers in the Palestinian Territories seeking to shorten youth unemployment duration. In this regard, easing school-to-work transitions for Palestinian youth may require reforms that both loosen labor market restrictions while simultaneously providing workers with alternative forms of social protection.
April 2011
The Palestinian Authority introduced the Palestinian Labor Law of 2000 to unify, clarify and simplify the regulatory framework surrounding employment in the West Bank and Gaza. Implementation of the Palestinian Labor Law could have lowered the costs of employing young workers in the Palestinian Territories. However, key components of the law, such as the increase in severance payments to dismissed workers, have introduced additional costs for employers seeking to hire and dismiss workers; in turn, firms have been less willing to hire young workers. As a result, youth in the Palestinian Territories now experience increasingly prolonged school-to-work transitions.
This policy outlook considers the implications of the Palestinian Labor Law on unemployment duration for young Palestinians in the labor market, and suggests alternative choices for policy makers in the Palestinian Territories seeking to shorten youth unemployment duration. In this regard, easing school-to-work transitions for Palestinian youth may require reforms that both loosen labor market restrictions while simultaneously providing workers with alternative forms of social protection.