<p>This study examines labor market dynamics in Palestine from 2000 to 2022, focusing on sectoral employment trends, sectoral wage disparities, and sectoral shifts in the labor market. It addresses gaps in previous research that relied mainly on descriptive analyses. Six hypotheses are tested on sectoral employment trends (H1, H2), sectoral wage disparities (H3, H4), and sectoral labor market shifts (H5, H6) using data from the Palestinian Central Bureau of Statistics (PCBS). The analysis combines nonparametric and econometric methods, including Kruskal-Wallis tests, ARIMA, Johansen cointegration, VAR, and panel OLS to capture both distributional differences and long-term dynamics. The study’s novelty lies in integrating sectoral time series and panel approaches to demonstrate how structural and sector-specific factors are associated with employment patterns and wage outcomes in a conflict-affected economy. The findings reveal persistent differences in employment across economic sectors, with unemployment being linked to labor transitions between the Agricultural and Service sectors. Wage outcomes exhibit clear hierarchies across economic sectors, alongside a distinct and widening wage premium in the public sector compared to the private sector. Economic sectoral productivity growth does not consistently translate into wage increases, while higher reliance on imports is associated with continued contraction in manufacturing employment. These results provide evidence-based insights that may contribute to strategies to strengthen productive sectors, reduce import dependency, and enhance the services sector’s capacity to absorb displaced labor, offering guidance for inclusive and sustainable labor market policies in Palestine.</p>