Israel Exceeds 2020 Target for Labor Force Participation

But rates for ultra-Orthodox men and Arab women still lag far behind government's goals.

Nir Keidar

Workforce participation rates overall in Israel have already reached the targets set by the government for 2020, but not all Israeli population groups have reached their goals, and officials are concerned about the quality of the jobs being filled.

The government has been trying to raise Israels relatively low labor force participation rate, which is defined as the percentage of working-age people who hold a job or are actively seeking one. Increasing the rate would enable the economy to grow more quickly and ensure a higher standard of living.

But large segments of the population, particularly ultra-Orthodox Jewish men and Arab women, have low rates of workforce participation, and those who do work tend to have low-paying, unskilled jobs.

The latest government figures show that in the 25-64 age group, the overall labor force participation rate was 77.2% for the first half of 2015, higher than the 76.5% target rate for 2020.

For Arab women, the rate soared to 32.5%, from 19% 20 years ago, but that is still far short of the 41% rate targeted for 2020, the Economy Ministry said. Among Haredi (ultra-Orthodox) men, the rate rose to 45.7% in the first half of 2015, after having fallen to as low as 32.9% in 2005, but it will still be a stretch to meet the 63% target for 2020.

Most of the growth in Haredi workforce participation rates is due to the steady increase in the number of ultra-Orthodox women who work outside the home. Among married Haredi women, who in contemporary Israel tend to support their families while their husbands pursue full-time religious studies, the rate jumped to 73%, 10 percentage points above the 2020 target for this group.

The director of employment regulation and Deputy Director General of the Economy Ministry, Michal Tzuk, said encouraging Haredi employment was important to Economy Minister Arye Dery, who heads the ultra-Orthodox Shas party and took over the portfolio only last spring.

The ministry is also intent on improving the quality of jobs, she added. Apart from reaching the targets, its important that more advance to the next stage, which includes increasing the number of hours worked and the quality of employment, expressed in salaries, Tzuk said

The effort to increase the labor force participation rate got underway in 2003 with a combination of carrots and sticks, such as job training on one hand and cuts to child allowances on the other. The army contributed by drafting Haredi men, who generally shun military service in order to pursue their religious studies, giving them job training and contact with the non-Haredi world.

In the Arab sector, hundreds of millions of shekels have been invested in job training and counseling centers.

The government has also failed to get more people with disabilities into the labor force. The 2020 target for this groups workforce participation rate is 5%, but for the first half of 2015 the average rate was just 3.9%, down from 4.5% a decade ago. For Arabs with disabilities, however, the rate was 8.3%, exceeding the target rate of 8.2%.