(Communicated by the Ministry of Economy)

In a report presented earlier this week and prepared cooperatively with the Deputy-Director for Employment at the Ministry of Economy, the OECD notes that Israel has weathered the world financial crisis well with low unemployment rates, but there are still two vulnerable groups with low participation rates in the labor market: Arabs and the ultra-Orthodox.

The OECD examined the 21 designated employment centers for the Israeli Arab and Bedouin populations in Israel, established in recent years by the Ministry of Economy in cooperation with JDC-TEVET, and emphasized that this is an important tool for these populations' employment advancement. The centers serve as a one-stop shops for the unemployed from the Arab sector, integrating and guiding them regarding suitable employment. The report also finds that the level of skills for these population sectors is still low among a large section of the Arab sector in Israel and that the government must invest more in professional guidance and various training courses.

From the OECD report: Employment and qualifications within the Arab sector of Israel

While many countries in the OECD region suffer from high unemployment rates, Israel has relatively successfully survived the last financial crisis with a zero effect on its unemployment rates. Despite the Israeli economy's financial growth, there are still two disadvantaged groups that require more thorough treatment - Arabs and the ultra-Orthodox (Haredim). The labor force participation rate among the general population in Israel is 66%, but it is only 52% for Arabs, and, even more critically, 50% of Arab-Israelis live below the poverty line. A new survey by the OECD examines what the Israeli government has done in recent years regarding employment of Arabs, and what challenges still face them in the future.

One of the innovations introduced in recent years were the employment centers for the Arab sector. The OECD notes their critical importance, particularly in their ability to place emphasis on the unique requirements of this sector, but it also emphasizes the need for a better connection with the economic activity on a local level. The OECD emphasizes that for these centers to succeed, they must be accompanied by local transportation and day care centers for children that are still critical obstacles in the integration of Arabs, particularly Arab women, into the labor market. The OECD issues a call to open more and more such centers and create cooperative ventures with additional organizations that operate in the Arab sector.

One of the most important tools for a more inclusive labor force is education, particularly higher education, and Israel is a unique case among the OECD countries, since the percentage of higher education graduates is 46% as opposed to an average of 33% in the OECD countries. According to the OECD's figures, higher education ensures employment since 85% of those with certification in Israel are in the labor market, as opposed to 47% without higher education. Higher education enables more women to enter the labor market, a critical factor in the Arab sector where only approximately 28% of the women participate in the labor force.

One of the problems in the Israeli labor force is of men with little education and their rate in the labor force has stagnated - a very different trend to that of the other OECD countries. Israel has succeeded in increasing the participation of Arab men up to the age of 45 in the labor force, but from this age onwards there is a steep rise in unemployment rates, and one of the reasons is that men in this population work in manual labor where age is a determining factor. The OECD emphasizes the importance of vocational training programs and guidance in places of employment to close the gaps, particularly within this sector. For this reason, the OECD emphasizes that these centers must be more involved in training, particularly in basic skills, since a worker without these abilities cannot hold a position in the long-term.

In summary: While the OECD review emphasizes that Israel is on the right track and that the labor force participation rate among the Arab population has continued to rise, the dimensions of poverty among this population have not changed significantly. The OECD emphasizes once again that without the increased participation of Arabs and the ultra-Orthodox in the labor market, Israel will not be able to close its productivity gap with the world's advanced countries that is currently 25% lower than the OECD average.