Mobility and Inequality: Evidence from an Israeli Counter-Terrorism Policy

Alexei Abrahams, Brown University

This paper finds that mobility disruption of a commuter economy tends to exacerbate preexisting spatial economic inequalities, while producing ambiguous aggregate welfare consequences. I study the Palestinian West Bank, 1997-2007, a small and densely populated land mass possessing a highly active commuter economy where laborers travel regularly between their hometowns and places of work. Starting in 2002 the Israeli army deployed numerous security obstacles (checkpoints, roadblocks) along the West Bank's internal road network, disrupting commuter traffic. Economic consequences for Palestinians varied depending on whether they happened to be dwelling in labor-demanding or labor-supplying towns. Labor-supplying towns offered few local job opportunities, so their residents were highly dependent on jobs in other towns. Obstacle deployment negatively affected employment rates, per-capita nighttime lights, and net-immigration rates of supplier towns. Resident laborers of labor-demanding towns, however, were significantly insulated against these effects, and may even have benefited from obstacles as they reduced the inflow of competing labor from other towns.