Labor market report in Israel for the year 2022

Key points in the report:

The labor market in 2022 was operating at full capacity. The employment rate in the main age groups was higher than before the COVID-19 crisis and higher in historical comparison. In the last decade, there has been an increase in the employment rates of Arab women and ultra-Orthodox women. Although the employment rate for Arab women is still very low, it has seen an increase across all age groups, accompanied by an increase in the education rate. The employment rate for young Arab women with a university education has nearly doubled during the decade.

The vacancy rate in 2022 was very high, reaching its peak at the beginning of the year with a rate of 5%. Since the last third of the year, the vacancy rate in the technology sector has decreased and is now lower than its rate in 2019.

In the past year, wages have returned to the pre-pandemic trajectory, but vary across different sectors due to inflation. Real wages decreased by 10% less than they were in low-wage sectors and increased by 2% more than they were in high-wage sectors.

Working from home remained an important part of the labor market structure. Despite the potential for expanding employment opportunities in rural areas, working from home is less common there. Various factors partially explain this phenomenon, but employees with the same place of residence in rural areas work less from home compared to their counterparts in urban areas.

Among self-employed workers, around 40% combine wage work and freelance work. Over the past twenty years, the number and percentage of those who combine both have increased. This is not due to the self-employed workers themselves, but rather due to those who were previously wage workers. This fact may indicate that the labor market is becoming more flexible and sustainable over time.

Minister of Labor, Yuval Ben Tsur: “The 2022 labor market report demonstrates our commitment to integrating diverse groups into the labor market and providing them with appropriate tools for the modern labor market. The ministry, under my leadership, is committed to this and seeks to find broad solutions to provide a flexible and thriving path to a better functioning labor market for all segments of society in Israel.

“I am confident and optimistic that with the budget we have secured for the Ministry of Labor in the next two years, we will be able to integrate more people into quality jobs in the labor market and achieve greater successes in the coming years, for the benefit of all citizens in Israel.”

Director-General of the Ministry of Labor, Israel Ozan: “The Ministry of Labor stands at the forefront and leads the world of employment, and therefore, we are committed to adapting to the changing reality. In recent times, the labor market has faced more complex challenges due to the advent of artificial intelligence (AI) and the changes it brings. We are in a crucial period, and thus, we closely study the impact of AI on workers and the labor world in general, and develop visions and solutions accordingly. This holds true for all sectors, especially when it comes to integrating diverse groups into employment. The report points out the trends that we must maintain alongside other issues we need to address and deduce their implications to enhance the labor market in Israel.”

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