This study provides estimates of the private returns to schooling in Palestine utilizing eight quarterly labor force surveys for 1999 and 2001. This period was chosen to investigate the differential impact of the Israeli closure policy on Palestinian male and female workers. Although gross enrollment ratios for males and females reveal little to no difference in the primary, middle and tertiary levels of schooling, returns to schooling are significantly different. On average, females earned 14–15% less than males in 1999. The gender gap is narrowed during 2001 due to rising male unemployment in the Palestinian areas. Performing the regression for males and females separately, it is found that returns to schooling are larger for women (at least at the margin). The gap in returns to schooling was reduced in 2001; however, female returns to schooling as estimated by OLS suffer from selectivity bias which worsened during 2001. The work in Israel premium increased for women and decreased for men. Finally, Palestinian public sector employment parallels periods of restricted access to Israeli labor markets; its average wages are lower and years of schooling are higher relative to private sector employment.