Trends in the Labor Market

This work looks at two highly influential trends in Israel’s current and future labor market. One has to do with changing occupational distribution; the other relates to changes in returns to education. The study finds that between 2013 and 2015 the number of work hours rose in those occupations at low risk of automation and computerization while the number of work hours in high risk occupations fell. This trend was especially prominent among women, and to a lesser extent among Arab Israelis and immigrants (versus the non-immigrant Jewish population).
An examination of returns to education finds an increase in the contribution of one year of formal education to wages between 2003 and 2014. Here, too, there are differences between men and women and the different social sectors. Especially prominent is the relatively consistent rise in the returns to education among immigrant men, and the larger increase among women than among men.
On the one hand, these developments reflect the Israeli labor market’s resilience and the opportunities available in it as the labor force adapts to an information and service economy. On the other hand, there are implications regarding wage distribution, among them the polarization in the labor market and rising wage inequality.