Number of Registered Job Seekers in Israel Dropped by 7.5% in 2017, Amid a Tight Labor Market

State employment service said worker dismissals edged up 1.2%

A shopper at the Super-Sol Deal store in Holon, January 1, 2017.
David Bachar

The number of Israelis who registered with the Israeli Employment Service dropped 7.5% last year, to an average of 166,000 a month, further evidence of a tightening labor market.

The government agency reported Sunday that it handled 406,000 people, most of whom received services for a number of months, for a 16% decline from 2013.

The number of people who reported quitting or being laid off from their jobs rose a slight 1.2% from 2016 to 19,300 a month, but the number of employed people overall grew 2.1% during the year. Moreover, the number of dismissals was virtually unchanged, at 11,700 in 2017 compared to 11,650 in 2016, the employment service said.

The numbers come after several years of falling unemployment even as growing numbers of Israelis, particularly ultra-Orthodox Jewish men, join the workforce for the first time.

The latest two months on jobless data from the Central Bureau of Statistics show a slight uptick in the unemployment rate, from 3.6% in September to 3.7% in November for the key 25-64 age group, and Teva Pharmaceuticals is in the midst of a massive downsizing of its Israeli payroll.

Nevertheless, economists see the employment rate holding steady for the foreseeable future. The Bank of Israel forecast in its latest economic forecast that the jobless rate would fall slightly to 3.6% in 2018 and remain there in 2019, versus a 2017 average of 3.7%.

The central bank says the tight labor market was evidenced also by the high number of job openings relative to the number of unemployed and a decline in the rate of people who are employed in part-time positions involuntarily as well a rapid increase in wages in the past two years.

During 2017, the number of people applying to the employment service for income support (welfare) benefits dropped a sharp 14.6% to a monthly average of just 77,700. The number of people without a college degree applying for unemployment benefits declined 2.2% to 67,800 a month

The number of Arab women who applied for income support dropped 31% last year in the 18 to 34 age group, more than double the pace for Israel’s overall population.

Arab women traditionally worked outside the home only rarely but the government is encouraging them to join the workforce.

Observers attributed the drop to the increasing number of young Arab women who have jobs as well as a growing number who are quitting off-the-books jobs for positions in the formal economy.

Another segment of the workforce targeted for government help is Israelis over the age of 50. In 2017 the percentage of unemployed job seekers registered with the employment service who found jobs declined by age, to as low as 10% for people ages 55 to 64.

To address the problem, which is particular severe in high-tech, the employment service ran pilot programs in the south and the Tel Aviv region, retraining around 2,200 educated and experienced workers aged 50 to 65.