Second-generation Jewish immigrants in Israel: have the ethnic gaps in schooling and earnings declined?

This article examines trends in the socio-economic gaps between Western and Eastern Jewish men and women in Israel for the period 1975-1992. The results, based on a quasi-longitudinal design of descriptive statistics (cross section and cohort analyses) and Ordinary Least Squares [OLS] regressions, suggest that in spite of a slight narrowing of the ethnic gap in schooling - the main factor affecting earnings - the overall earnings gap between second-generation Eastern and Western immigrant men has increased in the period 1975-1992. The widening in the earnings gap among men, despite the narrowing of the schooling gap, is rooted in three processes affecting the Israeli society and economy during this time: first, the ageing of both ethnic groups, second, the increase in the returns to college education, third, the tendency of Easterners to complete their college education later in life than Westerners. These processes affected men more than women, and therefore the ethnic earnings gaps among women are smaller than among men. Decomposing the earning gaps into 'explained' and 'unexplained' portions, we found that the 'unexplained' portion of the gap has increased during the period, especially among men.