The Palestinian Labor Force Dynamic Under the Israeli Occupation: An Impact Study and Lessons to be Learned for Restructuring the Labor Market", Working Paper presented in 10th conference. Economic Research Forum (ERF

: Thanks are due to Mr. Mohammed Omari, freelance translator and editor, for editing of this paper, and Mr. Sabeq Barghouti for translating some sections. This paper benefited from the unlimited access to the raw data of the deferent Palestinian Labor Force Survey rounds. The researcher would like to express his deep appreciation and gratitude to Palestinian Central Bureau of Statistics (PCBS). Last but not least, my deep thanks go to Mrs. Rana Karmy for her help 2 The paper aims at studying the labor force dynamic before and during the economic crisis that the Palestinian Territory is passing through since the end of September 2000. The study depends mainly on the data of labor force survey (data of the fourth quarter 1999 till the second quarter 2003). Dynamic probit model was used to achieve the aims of the study, three models was used to study the dynamics of labor force through time, these models allow for time variant coefficient. The main results of the study reveal that person background characteristics have a strong impact on employment probability at the beginning of the intifada, while the impact during intifada was of no statistical significance. Higher educatio