Social think tank sees slower economic growth in 2018

According to the report, the past year was characterized by an increase in employment and real wages – and a decrease in the unemployment rate to an historic low.

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December 28, 2017 16:01
2 minute read.
Light rail train car on display in central Tel Aviv.

Light rail train car on display in central Tel Aviv.. (photo credit: YOCHEVED LAUFER)

 
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Social think tank sees slower economic growth in 2018 Israel is likely to see slow economic growth due primarily to an increase in population groups with high unemployment rates and low skill sets, says a report issued by the Taub Center for Social Policy Studies.

The study, released this week under the title, A State of the Nation 2017, is based primarily on research compiled and edited by Prof. Avi Weiss, executive director of the center and professor of economics at Bar-Ilan University, and offers a snapshot of the socioeconomic condition of Israel in 2017.

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According to the report, the past year was characterized by an increase in employment and real wages – and a decrease in the unemployment rate to an historic low – which in turn has led to an increase in both consumption and the standard of living.

Despite this, large parts of the labor market are still characterized by low productivity and low wages. Price levels remain among the highest among member countries of the Organization for Economic Cooperation and Development.

The report offers a bleak macroeconomic long-term outlook, stating that the country is expected to face demographic challenges that will “likely slow the rate of economic growth, including a decline in the share of the working- age population, alongside an increase in the share of population groups whose employment rates are relatively low and whose skills are not compatible with the modern labor market.”

As such, the report dedicates two chapters to the patterns of Haredi (ultra-Orthodox) integration into the labor market as well as education and employment among young Arab Israelis – two population groups with relatively low labor rates.

With regard to the Haredim, researcher Dr. Eitan Regev found that in recent years there has been a significant rise in the employment rates of young ultra-Orthodox women and men.



Between 2008 and 2013, the employment rates of ultra-Orthodox women and men aged 23-30 rose by 9 percentage points, reaching 73% among women and 36% among men – the largest increase across all sectors.

Furthermore, the findings indicate that ultra-Orthodox living in homogeneous Haredi cities, such as Betar Illit and Modi’in Illit, both in the periphery and in the center of the country, have significantly lower employment rates than those living in mixed cities.

The employment rate among Haredi students is similar to the rate among Haredim who already hold an academic degree.

In 2013, approximately 76% of Haredi men with academic degrees (ages 25-35) and 67% of male Haredi students worked, compared with only 37% in the same age group who never pursued higher education.

According to Regev, this indicates that the employment level of Haredi men is more influenced by the decision to start working and learning than by actually earning a degree.

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