The Economic Impact of the Conflict on Israelis and Palestinians

The Israeli unemployment rate is 7.3%, while the Palestinian unemployment rate is estimated at 23%.

“[A] recent World Bank study predicts that, if the current situation continues throughout 2006, this may be the worst year in the Palestinian economic history. The average Palestinian’s personal income will fall by 40%, and 67% of the population will fall into poverty.” - A. David Craig, World Bank

Source: The source of the Israeli unemployment number is the CIA World Factbook on Israel. The source of the Palestinian unemployment number is the the World Bank Group’s Country Brief for the West Bank & Gaza.

We do not use the CIA World Factbook for the Palestinians because they do not provide a number for the combined Palestinian population in the West Bank and Gaza. Instead, they provide 2 distinct numbers. For the West Bank, they list unemployment at 18.6% and for Gaza, they list unemployment at 34.8%.

Although unemployment in Israel is higher than it was before the Palestinian uprising began, most economists blame the global slowdown, particularly in the high-tech sector for the increase. (According to Business Week, Israel has the most high-tech-dependent economy in the world.) The sharp rise in Palestinian unemployment, on the other hand, is universally viewed as resulting from Israeli policies of closure and movement restrictions.