Report shows effect of war on the Israeli labor market

A new report from Israel's Taub Center for Social Policy Studies analyzed the effects of the ongoing war on the Israeli labor market.

The report indicated that the overall rate of unemployment in Israel spiked at the beginning of the war in October 2023, reaching 9.6%.

While it dropped significantly in the months after Hamas' Oct. 7 attack, it remained higher than it was during the year and a half before.

“The rate of non-participants in the labor market who gave up searching for work or stopped working due to layoffs or business closures over the past two years rose compared to previous years,” the report stated. “In the first half of 2024, it averaged 1.3% (compared to 0.8% in the same period last year).”

While the number of jobs increased in “health, welfare, and social services (an increase of 34,000 employed persons) and education (22,000),” it decreased in “hospitality and food services (a decrease of 19,000 employees) and information and communication services (15,000, excluding high-tech services).”

The Taub Center report also indicated that employment among Arab men and Haredi (ultra-Orthodox) men dropped during the war, while employment among Jewish women remained stable and increased among Arab women.

“Arab women showed particularly encouraging results,” the report stated. “Unlike men in this sector, women experienced a consistent rise in employment rates, reaching 46% this year – the highest ever for the third consecutive year.”

The report also detailed the effects of military reserve duty on the labor market, noting that “the highest rate was observed in the infrastructure sectors, where nearly one in six workers was absent due to reserve duty,” while in “the management and support sectors and high-tech, about one-tenth of workers were called up.”

Gil Epstein, who authored the report with Michael Debowy and Avi Weiss, told the Jerusalem Post that “absences from work on the scale we have seen have severe effects on the labor market as a whole,” and that “policymakers must act immediately to minimize the damage to the labor market by increasing long-term investments in this area.”