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Israel


  • 21-December-2023

    English

    Addressing labour market challenges for sustainable and inclusive growth in Israel

    High employment growth has sustained Israel’s high GDP growth in recent decades, but demographic change and labour market duality put future growth at risk. Policy action is required to stimulate employment and raise labour productivity, especially among population groups with weaker labour market outcomes. A particular concern is closing employment gaps of Haredim and Arab Israelis and ensuring gender equality in the workplace, which would simultaneously improve opportunities for all Israelis and the aggregate labour productivity of the economy. This will require setting appropriate work incentives and providing better support for working parents; improving skills at all stages of the learning cycle; as well as increasing mobility and improving reallocation towards high-productivity jobs and firms, in particular in the high-tech sector.

  • 3-April-2023

    English

    Israel: labour, education and competition reforms key to sustain improvements in living standards

    Helped by its dynamic high-tech sector, Israel’s economy has rebounded strongly from the pandemic and has proven resilient to the economic impact of Russia’s war of aggression against Ukraine. Reforms to reduce labour market disparities and boost productivity would help to sustain, broaden and further boost gains in living standards.

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  • 22-December-2020

    English

    Reducing socio-economic differences between municipalities in Israel

    Despite being one of the smallest countries in the OECD, Israel is marked by significant socio-economic disparities, which have a clear spatial dimension. Ethnic and religious groups with weak socio-economic outcomes are not benefitting from the thriving high-tech sector in the centre of the country. As a result, there is a persistent lack of employment opportunities in the peripheral areas alongside skills shortages in the dynamic centre. Inequalities between municipalities are the highest in the OECD. Moreover, the current pandemic has hit poorer Haredi neighbourhoods particularly hard. The government should reduce barriers that prevent segments of the population from fully participating in the economic process and give everyone a similar chance to succeed, regardless of where he or she was born. This will require equal access to high-quality education, affordable housing, reasonable public transportation and improved urban planning in every municipality to reduce spatial divides and segregation of disadvantaged households. Local authorities can play a significant role, since good municipal government and effective policies to achieve national priorities are the best means to improve the outcomes of residents of poor areas.

  • 22-December-2020

    English

    Enhancing the efficiency and equity of the tax system in Israel

    Israel’s tax mix is reasonably growth- and employment-friendly. Nonetheless, tax reform is needed to foster an inclusive recovery from the COVID-19 crisis and help tackle Israel’s main economic and societal challenges of high poverty, including among those in work, and slow aggregate productivity growth. The earned income tax credit has been an effective tool to reduce poverty and increase employment among the low-skilled and could be further expanded. The business tax system provides large benefits that aim to incentivise companies to become more productive, but the existing design may create distortions. This preferential tax treatment should be reviewed with a view to better targeting the scheme to ensure net benefits to society. There is also scope to simplify the tax system by removing inefficient tax expenditures and better leverage Israel’s impressive technological capacity to further lower compliance costs and reduce tax evasion. Finally, excise taxes should be adjusted, including by taxing carbon more heavily, to improve environmental and health outcomes.

  • 17-November-2020

    English

    The impact of COVID-19 on SME financing - A special edition of the OECD Financing SMEs and Entrepreneurs Scoreboard

    The COVID-19 crisis has had a profound impact on SME access to finance. In particular, the sudden drop in revenues created acute liquidity shortages, threatening the survival of many viable businesses. The report documents an increase in demand for bank lending in the first half of 2020, and a steady supply of credit thanks to government interventions. On the other hand, other sources of finance declined, in particular early-stage equity. This paper, a special edition of Financing SMEs and Entrepreneurs, focuses on the impacts of COVID-19 on SME access to finance, along with government policy responses. It reveals that the pre-crisis financing environment was broadly favourable for SMEs and entrepreneurs, who benefited from low interest rates, loose credit standards and an increasingly diverse offer of financing instruments. It documents the unprecedented scope and scale of the policy responses undertaken by governments world-wide, and details their key characteristics, and outlines the principal issues and policy challenges for the next phases of the pandemic, such as the over-indebtedness of SMEs and the need to continue to foster a diverse range of financing instruments for SMEs.

  • 2-December-2019

    English

    Assessing incentives to reduce traffic congestion in Israel

    Traffic congestion is a major problem in Israel. Costs of congestion are estimated at around 2% of GDP, above levels in other high-income economies. The availability of public transport is being increased to tackle the problem.

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  • 23-March-2018

    English

    The key to breaking cycle of poverty in Israel lies in education

    Inequality and relative poverty in Israel remain high, particularly among Arab-Israelis and Haredim (Ultra-Orthodox).x

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  • 21-March-2018

    English

    United we stand divided we fall: the need for greater inclusiveness in Israel

    Today’s excellent outlook offers Israel a unique opportunity to prepare for the challenges of the future which require stronger social cohesion. Israeli society is indeed marked by large inequalities.

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  • 12-April-2016

    English

    Improving the pension system and the welfare of retirees in Israel

    Israel is a young country with still dynamic population growth, but it is already beginning to face the consequences of population ageing.

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  • 12-April-2016

    English

    Boosting competition on Israeli markets

    Promoting competition to enhance productivity at the firm level and resulting income and growth improvement and a lower cost of living is an important economic and social challenge in Israel.

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