Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Poverty inThePalestinianTerritories Seeing isBelieving 2014 Seeing is Believing Poverty in The Palestinian Territories 2014 Cover description: The cover illustrates the concentration of poor people in localities in the Palestinian Territories, by scaling (contracting or expanding) them according to the density of poor people per unit area, which is calculated with the method- ology by Gastner and Newman (2004). TABLE OF CONTENTS Acknowledgements ................................................... vii 1. Background and Context ............................................ 1 Country Context ................................................... 1 World Bank-PCBS Collaboration ....................................... 2 What is a Poverty Map? ............................................. 3 2. Poverty Mapping: Methodology ........................................ 5 Methodology ..................................................... 5 Main Data Sources and Technical Challenges .............................. 5 Data sources .................................................. 7 Technical challenges ............................................. 9 Choosing the appropriate consumption model ........................... 11 3. Modeling ........................................................ 15 Building the Model ................................................. 15 Final Model ...................................................... 16 Results ......................................................... 23 4. Mapping The Results ............................................... 25 A Fragmented Landscape ............................................ 25 Visualizing Poverty in the Palestinian Territories ........................... 30 Accessibility, mobility and poverty ................................... 34 Pockets of poverty and prosperity .................................... 36 Poor areas, poor people ........................................... 38 Are poorer households also larger? ................................... 40 Does education pay off? .......................................... 41 Unemployment goes hand in hand with poverty ......................... 44 5. Conclusion ...................................................... 51 6. References ....................................................... 53 7. Appendices ...................................................... 55 Poverty Results ................................................... 56 Merged Localities .................................................. 62 Localities in the West Bank Isolated or Affected by the Barrier Wall ............. 72 Percent of PCBS Localities Falling in Area C ............................... 76 List of Maps Map 1: Merged Localities – A zoom in of Hebron and Ramallah showing the localities that were merged together (in matching color) and those that were not (in white). 12 Map 2: A Divided Landscape ............................................ 26 Map 3: Punctuated by Barriers ........................................... 27 Map 4: Localities Isolated or Affected by the Barrier Wall ........................ 28 Map 5: Localities Falling in Area C ........................................ 29 Map 6: A Fragmented Geography: A map of locality boundaries (Built-up areas) in the West Bank and Gaza ............................ 30 Map 7: Merging localities in the West Bank .................................. 31 Map 8: The Poorest Governorates in the West Bank are better off than most Governorates in Gaza: Boundaries of West Bank and Gaza and Regional Poverty Headcount Rates (2009 Poverty Map estimates) ............ 32 Map 9: Mapping Poverty in the Palestinian Territories .......................... 33 Map 10: Mapping Mobility Restrictions in the West Bank ........................ 35 Map 11: Pockets of Desperate Poverty: Relative Poverty in Gaza ................... 36 Seeing is Believing – Poverty in The Palestinian Territories in The Palestinian – Poverty Seeing is Believing Map 12: Islands of Prosperity: Relative Poverty in the West Bank .................. 37 Map 13: Low Rates of Poverty can Mask a Large Poor Population .................. 38 Map 14: Density of Poverty: Poor Population per Square km ..................... 39 Map 15: Poverty Appears to be Correlated with Higher Rates of Dependency ......... 40 Map 16: In the Palestinian Territories, more Educated Places are not Always Better off .. 41 Map 17: In Gaza, Education doesn’t Bear Fruit; in the West Bank, iv Limited Aaccess to Education keeps some Places Poor ................... 42 Map 18: An Increasingly Educated Young Population ........................... 43 Map 19: Not a Pretty Picture: Unemployment goes Hand in Hand with Poverty ........ 44 Map 20: Unemployment Level of Youth (15–30 years of age) ..................... 45 Map 21: Private Sector Dominant Source of Employment in the West Bank; but in Gaza, the Public Sector is Widespread .......................... 46 Map 22: Irregular and Self-Employment Correlated with Poverty in the West Bank; not in Gaza .................................................. 47 Map 23: Areas Dominated by Agriculture and Manufacturing Tend to be Poorer ....... 48 Map 24: Dominant Health Insurance ...................................... 49 List of Tables Table 1: Administrative Units in The Palestinian Territories ...................... 8 Table 2: Consumption Model for Gaza 2009 .................................. 17 Table 3: Consumption Model for West Bank 2009 ............................. 19 Table 4: Comparison between the Actual Data and the Model Estimates by Region, 2009. 23 Table 5: Comparison between the Actual Data and the Model Estimates by Governorate, 2009 ............................................ 23 List of Boxes Box 1: The Small Area Estimation Method Developed by ELL (2003) ............... 6 Table of Contents Table v ACKNOWLEDGEMENTS This poverty map is a labor of love, the fruit of a very productive collaboration between the Palestinian Central Bureau of Statistics (PCBS) and the World Bank. The granular under- standing of the relationship between the unique fragmented geography of the Palestinian territories, and its poverty, health and education and important labor market outcomes is the result of the combined inputs and hard work of many over the last three years. It is our sincere hope that the data, analysis, and maps presented in this report are useful for pol- icy and program design and targeting for the Palestinian Authority and for development partners. The poverty map was officially launched on June 27, 2013 by the PCBS, and was presided over by H.E. the Prime Minister. The core World Bank team, led by Tara Vishwanath (Lead Economist, MNSED), comprises Brian Blankespoor (Environmental Specialist (GISP), Computational Tools – DECRG), Faythe Calandra (Program Assistant, MNSPR), Nandini Krishnan (Economist, MNSED), Meera Ma- hadevan (Consultant, MNSED) and Nobuo Yoshida (Senior Economist, PRMPR). Thanks also to Roy van der Weide (Economist, DECPI) for comments and suggestions and for sharing the work on mobility and access restrictions (joint with Brian Blankespoor). We are all very privileged to have worked on this project for the Palestinian Territories, and with a very com- mitted team from PCBS, led by Ms. Ola Awad, and we thank them. Very special thanks to the United Nations Office for the Coordination of Humanitarian Affairs (UN-OCHA oPT), and in particular Fuad Hudali and Yehezkel Lein, for sharing data and for many insightful conversations. Their commitment to collecting and sharing timely data is inspiring. Peer reviewer Peter Lanjouw (Research Manager, DECPI) provided very helpful comments, as did other colleagues; thank you. The team gratefully acknowledges the support and guidance of Mariam Sherman (Country Director, West Bank and Gaza), Bernard Funck (Sector Manager, MNSED) and Manuela Ferro (Sector Director, MNSPR). Cover design and all maps were painstakingly created by Brian Blankespoor. Many thanks. 1 BACKGROUND AND CONTEXT Country Context The Palestinian Territories have a uniquely fragmented geography, characterized by the isolation of Gaza from the rest of the world, and the man-made barriers to mobility within the West Bank. The internal mobility restrictions imposed by Israel, unique to the West Bank, play an important role in explaining spatial variations in outcomes within the West Bank. This is strikingly analogous to the role of Gaza’s external barriers in explaining the divergence between the West Bank and Gaza. These have consequences for poverty and economic development. Detailed analysis using a series of labor force and household surveys were undertaken as part of the West Bank and Gaza Poverty and Inclusion As- sessment, Coping with Conflict?. The analysis revealed that over the last decade, internal and external barriers have been associated with tremendous constraints to growth and investment, which is evident in high rates of unemployment, especially in Gaza and among women and youth. Over the same period, the territories have also witnessed large and widening gaps in pover- ty and labor market outcomes between the two territories of the West Bank and Gaza. Argu- ably, one of the most important reasons for this divergence is the external mobility restric- tions imposed on Gaza, which has been entirely “closed” with almost all movements across the border controlled by Israel. In practice, this means that few people and a limited