Chapter 7

Employment and Under-utilization of Labour

Labour Activity and Living Conditions
The purpose of this chapter is to investigate important aspects of the labour activity of Palestinians residing in the occupied territories. Both the present data and the limited space available have prohibited any exhaustive account of this comprehensive subject. The aim is rather to provide an overview of the situation, and draw attention to some topics which need further investigation.
The overall perspective applied is one of living conditions, which should be understood as encompassing both material and non-material elements. Labour activity directly and indirectly affects a long range of living condition components. This chapter will, however, primarily deal with employment in relation to household economic resources¹.

Labour activity, normally, is the most important source of household income. It is often also more uniformly distributed than other income types. The economic importance of employment is particularly great in economies without extensive social welfare arrangements. When alternative sources of income are scarce, lack of employment represents a serious threat to the material welfare of households. In a living conditions perspective, particular attention must thus be given to the nature and manifestations of underemployment².

This chapter is subdivided into two main parts. The first part will discuss the nature and manifestations of certain types of under-utilization of labour in the occupied territories. The second part will focus on the employed, and their distribution over area, type and economic branch of work. A separate discussion of female labour activity is also conducted in this section.

Labour Force Definitions
For measurement of supply and utilization of labour in household surveys the ILO has endorsed application of the so-called "labour force framework". This classification system uses standardized employment definitions to allow for consistent cross-country comparison of data. A somewhat adapted version of the labour force framework is used by FAFO to fit specific living conditions requirements. The labour force framework system is also used in the annual Israeli labour force surveys of the occupied territories. Figure 7.1 gives an overview of the main categories used in the FAFO living conditions survey:

Based on a person's activities in the so-called "determinant week" the labour force framework divides the population, 15 years or older, into three exhaustive and mutually exclusive categories³. "Employed" (box Ia, Ib and Ic above) comprise all persons who worked at least one hour in the reference week, or persons who were temporarily absent⁴. "Unemployed" (box II above) are persons who did not work even one hour, but who at the same time actively sought work. Employed and unemployed persons together make up the "currently economic active population" or "labour force". Persons 15 years or older who are not "currently economic active" and persons outside the survey population together make up the "not in the labour force" category (box III and IV above).

Figure 7.1 Labour survey definitions used by FAFO

Note that the concept of "work" does not refer to paid work or work outside the home exclusively, as is commonly thought. Non-market activities like unpaid work in family farms or business, and several types of home production, are also included. Unpaid housework, like child care, cleaning, washing and cooking are, however, generally not considered as work⁵.

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