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January 30, 2015 11:17 am

Israel’s Statistics Bureau Announces Significant Drop in Unemployment, Particularly Among Arab Workers

avatar by Ben Cohen

Israel's technology sector accounts for 9.1 percent of employees. Photo: Twitter

Figures released by Israel’s Central Bureau of Statistics have revealed a sharp drop in unemployment in 2014, particularly among Arab workers, despite the slowdown in economic growth during the war in Gaza last summer.

The total unemployment rate for 2014 was 5.9 percent, down from 6.2 percent in 2013. Among Jewish workers, the rate of unemployment was 5 percent, as against 5.3 percent the previous years; among Arabs, there was a welcome decline from 7.3 percent in 2013 to 6.1 percent in 2014.

There was good news for women too, whose participation rate in the labor force grew by one percentage point to 59.2 percent. Altogether, the Israeli workforce expanded by 223,000 in 2014, to 3.78 million, with the technology sector accounting for 9.1 percent of employees.

Compared to other member states of the Organization for Economic Cooperation and Development (OECD), which brings together 34 countries with democratic systems and free market economies, Israel’s unemployment rate of 6.2 percent is much lower than the average rate of 7.2 percent; in France, for example, unemployment stands at 10.3 percent, while in Sweden, the number is 7.9 percent.

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The decline in unemployment suggests that the Israeli government’s strategy of directing under-represented groups into the workforce, such as ultra-orthodox Jews and Arabs, is working. According to Haaretz, many Israeli economists say that the jobless rate in Israel is largely made up of people who are unemployed simply because they are between jobs or have just completed military service or studies.

The boost in the labor force is not the only sign that Israel’s economy is recovering after the trials of last year. In a recent briefing note, BlueStar Indexes, a New York-based equity firm that specializes in Israeli markets, pointed out that Israel has been “one of the three fastest growing Developed Market economies each year since 2004. 2014 will be an exception due to economic contraction in Q3 2014 and below trend growth in Q4 2014 due to the impact of the summer 2014 war with Hamas on consumer spending, tourism and business confidence.”

The note concluded: “The economy has not yet fully recovered but recovery will likely be fully discounted by Israeli asset markets by the  end of Q1 2015.”

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