Nearly four weeks into the Ukraine war, only a few thousand immigrants from Ukraine and other former Soviet countries have arrived in Israel. But the government is readying for 100,000 of them – and if that happens, the impact on the economy could be significant.
With eyes looking back on the wave of aliyah from the former Soviet Union in the 1990s and the giant boost that gave to Israel, many are looking for a repeat, albeit on a smaller scale. Plans approved by the cabinet last week talked about emergency housing solutions to accommodate them all, conjuring up memories of the earlier days of Russian aliyah.
Israeli politicians are speaking about immigrant absorption not only as a mission of mercy but as a good investment. Lawmaker Zvi Hauser (New Hope) says spending 5 billion shekels ($1.54 billion) on aliyah would yield 500 billion shekels in a few years. “We mustn’t miss a strategic, economic and social opportunity,” he told a Knesset Finance Committee meeting earlier this month.
The collapse of communism opened the gates for about 920,000 immigrants from former Soviet countries over the course of a decade. The wave of newcomers, who eventually came to comprise an astonishing 14.5 percent of Israel’s population, created short-term problems of providing housing, infrastructure and services, like the ones the cabinet sees possibly arising today.
But the ’90s aliyah provided a critical economic boost. Those immigrants were extraordinarily well educated (41 percent had college degrees versus 29.5 percent of native Israelis at the time) and came with relatively few children to put a burden on schools.
They arrived just as Israel’s high-tech sector was taking off and provided critical manpower. They alleviated a shortage of doctors and created new markets for local companies. They also arrived at a time when there were far fewer Israelis and the population density much thinner, and when the threat of climate change was not widely understood.
In any case, the Israel of 2022 is very different from the Israel of 1989. Prof. Dan Ben-David of Tel Aviv University and the Shoresh Institution notes that Israel is now the third most densely populated country among members of the Organisation for Economic Co-operation and Development. Even without 100,000 new immigrants, Israel is on track to become the most crowded in another decade.
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“This societal congestion manifests itself in congested classrooms, laggard receipt of health care, rush hour traffic that has transformed far beyond its name into sizable chunks of mornings and afternoons spent on commuting – and, of course, skyrocketing housing prices,” says Ben-David.
On quality-of-life issues such as classroom space, hospital beds per capita and cars per kilometer of roadway, Israel lags behind other developed countries and needs to invest more. But, as Ben-David notes, absorbing tens of thousands of immigrants – many of them coming without any assets because they fled a war zone or due to Western sanctions – will divert government spending away from critical needs.
Israel also faces a housing shortage that years of government efforts have failed to solve. The sudden arrival of tens of thousands of immigrants would make things worse, especially in the rental market.
Worst possible scenario
A lot hinges on how many immigrants arrive – not only from war-torn Ukraine but also from Russia, whose economy has been laid low by sanctions, as well as other former Soviet republics. Another factor is how many will stay.
It’s difficult to get a firm handle on the number of Ukrainian and Russian Jews eligible to immigrate to Israel. Years of antisemitism and communist rule decimated Jewish communal institutions and caused many Jews to shed their Jewish identity and/or intermarry.
A 2020 report by Prof. Sergio DellaPergola and Daniel Staetsky for the Institute for Jewish Policy Research puts the number of Jews in Ukraine and Russia at as little as 200,000 and as many as 800,000, depending on which “Who is a Jew?” definition is used.
If only people who self-identify as Jewish are counted, there are just 45,000 in Ukraine and 155,000 in Russia. Adding in people with one Jewish parent, the number of Ukrainian Jews doubles to 90,000 and more than doubles to 320,000 in Russia.
The numbers swell to 140,000 and 460,000 in Ukraine and Russia, respectively, if the Law of Return definition of one Jewish grandparent is applied and their immediate families are added to that.
In any case, the numbers will be nothing close to the earlier aliyah wave. An influx of 100,000 immigrants would add just 1 percent to Israel’s current population.
How many of Ukraine and Russia’s Jews will choose Israel at a time when Europe is welcoming at least Ukrainian refugees with open arms?
Jonathan Boyd, executive director of the Institute for Jewish Policy Research, says the initial signs are that many, if not most, Jews fleeing Ukraine expect to return home after the fighting and aren’t thinking about resettling in another country at all.
If they do decide that they can’t or won’t return, for many, if not most, Israel is just another country that will have to compete in terms of standard of living or other attractions as a permanent home, Boyd says.
“What happened in the 1990s, after the collapse of communism, is that people went to Israel because there was so much pent-up Jewishness,” he explains. “But I think that has diminished. The further we get away from that time, the more likely it is people have a weaker and more fragmented Jewish identity.”
This increases the risk of the worst possible immigration scenario in economic terms: Refugees come as immigrants, avail themselves of services the government offers under the Law of Return, and then pick up and leave for another country. Israel will have been saddled with immigration costs and never get any payback in the form of their labor contribution to the economy, Ben-David says.
If the majority of immigrants do choose to stay, the question then is whether they will contribute to the Israeli economy as immigrants of the previous aliyah wave did.
The job market could certainly use them. For several years now, and especially since the worst of the coronavirus pandemic receded, Israel has been experiencing a labor shortage, especially in its high-tech industry. In fact, the tech labor shortage has been exacerbated by the loss of some 15,000 Ukrainians who were working for Israeli companies before the war broke out.
However, the demographic profile of the Ukrainian and Russian Jews is less favorable today than it was 30 years ago. Even after the ’90s aliyah receded, immigration to Israel continued under the radar: a total of 130,000 between 2000 and 2019, in response to political turmoil and diminished economic opportunities at home.
The result is that the core Jewish population in both countries is now relatively mature. In Ukraine, for instance, about 70 percent of all Jews are over age 45 and just 5 percent under age 14. Boyd doesn’t have statistics on Russia but estimates they are about the same.
As to their education and skills, little information is available. However, even if they do bring high levels of both, an aging population of immigrants will on the whole contribute relatively few years of labor, if any at all, before retiring and making use of health care and other government services.