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.
Published on December 21, 2023
In series:OECD Economics Department Working Papersview more titles