Aliya from France great for economy, Bar-Ilan profs say

"Due to the economic association agreements between Israel and the European Union, France continues to pay the pensions for French retirees who made aliya."

Potential French olim at aliya fair in Jerusalem, March 11, 2015 (photo credit: SAM SOKOL)
Potential French olim at aliya fair in Jerusalem, March 11, 2015
(photo credit: SAM SOKOL)
The boom in French aliya has been a boon for the economy, but Israel risks discouraging additional arrivals if the too many of the newcomers continue to have trouble getting good jobs, two professors say.
“... for every one shekel the state spends on them [French olim], the state receives 15 shekels back,” Prof. Daphna Aviram-Nitzan, head of the Migration Research Unit at Bar-Ilan University in Ramat Gan, told The Jerusalem Post in an interview on Sunday.
Research conducted by Aviram- Nitzan and economics professor Elise S. Brezis at the Migration Research Unit at the university’s Aharon Meir Center for Banking and Economic Policy suggests that the wave of aliya from France in recent years directly contributed to national economic growth, and that the future growth that the olim can bring far outweighs the cost of their aliya. However, aliya from France is in decline.
The research was commissioned by an undisclosed donor to the Migration Research Unit and was completed in August.
The researchers analyzed data from the Central Bureau of Statistics and the Jewish Agency, as well as interviews with relevant officials in Israel and in France, looking at it through the Solow-Swan model of economic growth.
The Solow-Swan model attempts to explain long-term growth by examining capital accumulation, labor force and population growth, and increases in productivity.
“The growth potential is empiric, we added in the cost benefit outlook because that’s the language that the relevant government authorities need to hear in order to realize the importance of the French olim,” Aviram-Nitzan explained.
According to the research, which studied the 20,000 French olim who arrived in Israel in the last two years and constructed a long-term model for the next decade based on this data and potential future aliya, the olim increase GDP by an estimated annual 0.46%, which at the time of writing the research translated to NIS 5 billion a year. The accumulated growth for the next decade is estimated at 4.9% addition to the GDP. In addition, the research suggests that if the number of olim is maintained according to the researchers’ projections the state will reap an additional NIS 16.2 billion in taxes over that 10 years.
“The growth potential in French aliya stems from the characteristics of the French olim. As opposed to other waves of aliya, this one arrives with preexisting skills and qualifications for a Western labor market, 50% of them have academic degrees. The Israeli economy would receive a ‘free gift’ as the state invests billions in order to produce the much needed academics for its labor force, and here we have a potential for a wave of such academics that the state didn’t spend a single shekel on creating, Aviram-Nitzan told the Post.
“Also in terms of retired French olim, the state has nothing to fear or lose since French pensioners will not constitute a burden to the state. Due to the economic association agreements between Israel and the European Union, France continues to pay the pensions for French retirees who made aliya. We are talking about €12b.-13b. a year are wired by France to Israel for the pensions. This is purchasing power that Israel will gain without doing anything,” she said.
The entire projection, however, is theoretical and depends on the state’s ability to ensure that immigration from France continues in high numbers. But as the research’s appendixes show, aliya from France dropped from 7,500 olim in 2015 to 4,000 in 2016, and the projection for 2017 suggest number closer to 2,000.
“There is a great potential for aliya in France, but it is decreasing and losing momentum mainly due to employment fears by potential French olim,” Ariel Kandel, CEO of the Qualita umbrella-organization for French olim, told the Post.
“Today it is not enough to simply come up to Jews in France and tell them to come to Israel, the state has to realign its priorities in order to facilitate the aliya and offer the olim better absorption solutions, especially in the employment field.”
Both Kandel and Aviram- Nitzan said that many young French Jews are looking at their friends who immigrated to Israel and see that they are still unemployed, or work outside their vocation.
According to Aviram- Nitzan, the state is about to miss an opportunity for an economic growth spurt by neglecting the French aliya, and will only reap these benefits if the numbers of olim are substantial and those olim are gainfully employed in accordance with their skill sets and education.