Ethiopian immigrants without work experience have unseated Arab Israelis for the title of the lowest-earning group in Israeli society, a new study has found.

The research, conducted by Dr. Erez Siniver, chairman of the School of Economics at the College of Management, Academic Studies and Prof. Gil Epstein of Bar-Ilan University, is based on Central Bureau of Statistics data from 2010. It compares earnings data for people with 12 years of schooling or less.

When they first enter the work force, Ethiopian immigrants earn 30% to 40% less than Arabs with the same number of years of schooling, found the researchers. After 17 years of work experience, Ethiopians manage to pass their Arab counterparts. Ethiopian women start outearning Arab women after 20 years, while Ethiopian men pass Arab men after 10 years.

A 36-year-old Arab man with nine years of schooling and 21 years of work experience earned an average of NIS 171 a day in 2010, while a 33-year-old Ethiopian man with six years of schooling and 20 years of work experience earned an average of NIS 137, the study found.

Furthermore, Arabs earn a higher return on secondary-school education than Ethiopians: Every additional year of non-college education enables an Arab to earn an additional 3% more than an Ethiopian with the same education.

Yet Ethiopians earn more from workforce experience than Arabs do, Siniver said. "When you consider work experience, you see that for every year of experience, an Ethiopian immigrant earns more than an Arab. The wage gaps between Ethiopians and Arabs shrink by 2.5% a year."

Ethiopian women were slower to catch up with their Arab counterparts, Siniver added, most likely because Ethiopian women had more trouble finding work.

The top-earning group in Israeli society is native-born Israeli Jews, followed by immigrants from the former Soviet Union. Arab Israelis were in third place, said Siniver.

Arabs had ranked last through the 1980s and 1990s, but now that's changed. "Thanks to the Ethiopian immigration, Arabs are no longer at the bottom of the wage scale," he said.

Why are Ethiopians the country's worst-paid workers?

Siniver says the problem begins with their numbers. While there are 1.5 million Arab Israelis, there are only 140,000 Ethiopians. Thus, Arabs can employ each other. Ethiopians, in comparison, cannot rely on their community connections in order to find jobs, simply because there are fewer jobs available within the community.

"New immigrants face two main obstacles - cultural gaps and the concentration of workplaces [within specific communities]," Siniver said. "With the Russian immigration, for instance, there were cultural difficulties, but due to the fact that there were 1 million immigrants, they were able to employ each other, which broke the concentration of workplaces [in other sectors]. This happens in the Arab community as well. The Ethiopian community isn't large enough to form a network of workplaces."

Yet Siniver and Epstein said they were surprised by their findings. "If you look at the United States, the best-paid group is native-born white men, followed by white immigrants, then black immigrants and finally native-born blacks," Siniver noted. "That's generally explained by stating that the people who tend to immigrate are the best workers who can rely on their skills, who also have more motivation, and thus tend to earn more. We expected to see the same pattern in Israel, but we were proven wrong."

The research didn't prove that Ethiopians faced more discrimination than Arabs, he added. "We don't know who faces more discrimination. Both groups are subject to discrimination, but for different reasons: Jews discriminate against Arabs for nationalist reasons, while Ethiopians are subjected to discrimination due to their skin color and society's aversion to differences," he said.

Asked to explain why Ethiopians pass Arabs after 17 years of work experience, Siniver said that initially, the job market placed more value on Arab workers.

"I presume that employers of Ethiopian workers slowly discover, after the workers have proven themselves and the employers are no longer afraid to have them on staff, that it's not that bad. They advance and start earning more," he said.

In order to combat workplace discrimination, the state needed to invest in tolerance education and do away with Ethiopian-only schools, Siniver suggested.