ABSTRACT
In order to better understand the economic position of the Arab population in Israel a brief review of economic development during Israel's pre-state period is in order. During the 1920s leaders of the Jewish labor organization directed most of their efforts towards securing jobs in the Jewish sector for members of the labor organization and at the same time underscored the national nature of the labor market struggle. Treating the two economies as analytically separate, Metzer and Kaplan applied import-export analysis to study the exchange between the Arab and Jewish economies. During the upheaval brought about by Israel's War of Independence in 1947-1948, the majority of the Arab population, including the more educated and wealthy urban dwellers, fled the country. The Arab economy that remained in the wake of the 1948 war and the establishment of the State of Israel was a village economy catering to its own needs and concentrated in agriculture.
