Conflict exposure and labour market outcomes. Evidence from longitudinal data for the Gaza Strip

This paper documents the effect of variations in the individual-level intensity of conflict exposure on various labour market outcomes for Palestinians living in the Gaza Strip. Combining individual-level longitudinal employment data and geolocalised information on conflict-related events, we show that an increase in conflict exposure of the individual, while it does not affect the employment status on average, it has a heterogeneous impact on job transitions depending on the worker being employed in the private or the public sector. We also find that, for those in the private sector, higher conflict exposure reduces the labour income and the number of hours worked. For those in the public sector, the effect of conflict is instead null on both the labour income and the number of hours worked and it is positive on wages. Finally, we provide suggestive evidence that these results are explained by the combination of two mechanisms, namely the conflict-induced change in the health conditions of the workers (which affects the labour supply) and in the level of the local economic activity (which affects the labour demand).