ABSTRACT
This chapter deals with the impact of spatial segregation on socioeconomic achievements of Arabs and Jews. It focuses on the way in which individual-level and ecological variables jointly affect inequality between Jews and Arabs in Israel. The literature on local labor markets underscores such features as community size, industrial structure, economic conditions and sociodemographic composition as important determinants of socioeconomic inequality. Economic diversity, though related to size, is likely to exert independent effects on individual-level attainment. Diversity refers to the number and variety of jobs available in a labor market. Community characteristics are thus viewed here as intervening between ethnicity and socioeconomic outcomes. Part of the economic gap, however, can be attributed to the differential effect of labor market characteristics on the economic attainments of members of superordinate and subordinate groups. The industrial structure of labor markets appears to affect workers' income in intricate ways.
