The limited employment opportunities in public and private sectors, political and economic instability are all challenging unemployed individuals in Palestine to enter the workforce through entrepreneurial avenues in pursuit of self-employment. But, paradoxically the tendency to self-employment in Palestine decreased from 26% in 2005 to 24% in 2007 and around 18% in 2017 (PCBS, 2018).  This work tries to answer two important questions: How both human capital and labor market characteristics affect the transition of youth into self-employment (self-employment decision) or entrepreneurship? Is the self-employment in Palestine an opportunity-driven or a necessity-driven phenomenon?

To answer the research questions, we use the Palestinian labor force micro-panel data (2009-2016) and a multinomial logit model. The findings highlight the positive effect of opportunity identification, resources, readiness and training, and entrepreneurial education on the likelihood of entrepreneurship in both West Bank and Gaza. Results support both the human capital theory, and the “opportunity-driven” entrepreneurship model in both West Bank and Gaza, i.e. pull motivations rather than push motivations who control the engagement of youth into entrepreneurial activities. Also, we found that the very high education rate for women in Palestine is not translated into job opportunities. In both West Bank and Gaza, women were less inclined to engage in self‐employment as their employment choice, which confirms the structural inequalities that women face in regards with new business creation. Finally, we found a strong association between entrepreneurship and occupation group; i.e. workers have low likelihood for self-employment in non-manual jobs which requires the development of technical and vocational education and training (TVET) for workers who might not have strong educational preferences.

The limited employment opportunities in public and private sectors, political and economic instability are all challenging unemployed individuals in Palestine to enter the workforce through entrepreneurial avenues in pursuit of self-employment. But, paradoxically the tendency to self-employment in Palestine decreased from 26% in 2005 to 24% in 2007 and around 18% in 2017 (PCBS, 2018).  This work tries to answer two important questions: How both human capital and labor market characteristics affect the transition of youth into self-employment (self-employment decision) or entrepreneurship? Is the self-employment in Palestine an opportunity-driven or a necessity-driven phenomenon?

To answer the research questions, we use the Palestinian labor force micro-panel data (2009-2016) and a multinomial logit model. The findings highlight the positive effect of opportunity identification, resources, readiness and training, and entrepreneurial education on the likelihood of entrepreneurship in both West Bank and Gaza. Results support both the human capital theory, and the “opportunity-driven” entrepreneurship model in both West Bank and Gaza, i.e. pull motivations rather than push motivations who control the engagement of youth into entrepreneurial activities. Also, we found that the very high education rate for women in Palestine is not translated into job opportunities. In both West Bank and Gaza, women were less inclined to engage in self‐employment as their employment choice, which confirms the structural inequalities that women face in regards with new business creation. Finally, we found a strong association between entrepreneurship and occupation group; i.e. workers have low likelihood for self-employment in non-manual jobs which requires the development of technical and vocational education and training (TVET) for workers who might not have strong educational preferences.

Conference Title

Knowledge-Based Economy in Qatar: Trends and Opportunities For Interdisciplinary Research And Policy.

Conference Country

Palestine

Conference Date

Oct. 27, 2020 - Oct. 28, 2020

Conference Sponsor

Qatar university

Additional Info

Conference Website