This paper examines the characteristics of labor force participation among Arab women in
Israel. The participation rates of Israeli Arab women are low relative to those of Israeli Jewish women and to women in Western countries. In a series of empirical tests, making use of intra-temporal and inter-temporal variation, the study characterizes the key determinants of the patterns of participation of these women. Higher education and marital status are important in explaining participation, as are modern attitudes and modern knowledge. A key implication of the findings is that it is not enough to strengthen “explanatory variables”—such as education— so as to bring about an increase in participation. It is also necessary to take measures that will help overcome the difficulty in “translating” explanatory variables, such as education, into participation. This difficulty may be due to frictions, such as informational issues and obstacles to mobility, and to discrimination. The paper proposes a series of policy measures to raise participation and simulates a number of future participation trajectories and their potential contribution to GDP.

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