The longer employees remained outside the workforce after being released during the coronavirus crisis, the worse their chances of returning to work became, according to a new study by the Israel Democracy Institute and the Employment Service (IES).
This finding remains true even as labor market conditions improved in the spring and summer after closures were lifted, the report found. The study also shows that the proportion of young people who left employment was higher, but the duration of their unemployment was relatively short compared to adults.
The study found that the people who lost their jobs in greatest numbers were women, workers without academic education, and young people, without significant differences between Jews and Arabs.
The length of time outside the labor market increased with age and was higher among Arab employees compared to Jewish employees. Rates of return to the labor market were higher among women and academics, and lower among Arabs.
About 40% of the young employees (aged 44-25) who were employed in 2019 were unemployed at some point throughout the crisis. About 46% of ultra-Orthodox employees registered with IES, compared with about 32% of non-ultra-Orthodox Jews.
Arab workers were on average out of work for about a month longer than Jews, and older workers were out of work for longer than young people. More Arabs than Jews were unemployed except in the 21-29 age group, where the rate of Jews unemployed was higher.
People with academic degrees had much higher employment levels especially among Arab and ultra-Orthodox employees, the report noted. About twice as many people without academic degrees registered with IES as those with degrees, by proportion.
“The findings of the study once again indicate that job seekers who are at occupational risk are those who are farther away from the labor market, as the Employment Service has argued since the early stages of the crisis,” said IES Director-General Rami Grauer. “The rationale underlying the new model for extending unemployment benefits is to be welcomed, which we believe will lead to a massive return to the labor force. However, it should be borne in mind that even at the end of the eligibility period, many job seekers may find it difficult to return to work, fall into prolonged unemployment, perhaps even chronic, and in many cases also need social benefits. We must work to cultivate human capital and adapt it to changing market conditions, encourage people to return to work, and provide support for those who need it and have difficulty returning to work.”
“Women and Arabs registered more as job seekers during the crisis, but women returned faster and to a greater extent than men while Arabs returned slowly and to a lesser extent than Jews,” noted Economy Minister Orna Barbivay. “It is our duty to reduce the widening gap due to the corona crisis, while creating an economic safety net adapted to the populations of job seekers, especially in view of the end of the period of entitlement to unemployment benefits.”
“Even before the crisis, there was no doubt about the need to invest more in employing ultra-Orthodox and Arabs, including professional skills training, in order to improve the standard of living, reduce gaps, increase tax revenues, and increase their adaptability in crisis situations,” added Itamar Yakir, a researcher at the Israel Democracy Institute who conducted the study.