Informal Network, Social Participation and Employment Sector Allocations in the Palestinian Labour Market

The Palestinian Territories represent a geopolitical context with lack of independent political institutions and a traditional sense of community. Under these conditions, informal institutions and informal network become the coping strategy to several problems. This paper addresses the questions of whether and how social participation and informal network might affect employment sector allocations in the Palestinian labour market. The work makes an extensive use of a unique survey data on social capital conducted in West Bank in 2007 and administered by The Palestinian Bureau of Statistics. The analysis is based on a combination of techniques. Firstly, we employ a multinomial logistic model in order to detect whether social participation and informal network are significant predictors of the employment sector allocations for men and women. Then, we use predicted probabilities to analyse the impact of the variables of informal network and social participation on employment allocations conditional to the level of education. Preliminary findings show that informal network is more beneficial for men than for women especially in the private and self-employment sector. However, social participation helps women to escape unemployment but does not have any effect on men. The questions addressed in this work are important for policy recommendations. Public budget constraint induces to reforms focusing on the reduction of the category of the civil servants. Shading light on the informal dynamics affecting labour market allocations might provide useful insights for a more efficient labour market strategy.