This paper quantifies the roles of ethnicity, gender and location in rural income inequality in Israel. Between 10 and 16% of rural income inequality is explained by the Jewish-Arab divide. Schooling and household size, which are respectively much lower and higher among the rural Arab population, also explain significant fractions of income inequality. Location and gender of the household head explain much smaller fractions. Education-enhancing policies directed at the lower end of the schooling distribution, and at Arab municipalities in particular, are recommended to reduce per capita income inequality in rural Israel and narrow the Jewish-Arab gap. This could contribute to reducing the tension between the Jewish majority and the Arab minority in Israel, and to creating a better atmosphere for their neighborly coexistence.
Bibliographical noteFunding Information:
Financial support from The Center for Agricultural Economic Research is gratefully acknowledged. An earlier version of this paper, entitled ‘Gender, Ethnic Minorities, and Rural Income Inequality: The Case of Israeli Arabs,’ was presented at the Mediterranean Research Meeting, 25–28 March 2009, Montecatini Terme, Italy.