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two decades before 2008; now about 55,000 graduate annually. In addition, immigrants arriv-
ing from the former Soviet Union in the 1990s had an exceptionally high level of schooling,
bolstering the ranks of Israel's skilled and educated workforce.
Israel, however, has failed to utilize its human resources fully. At 57.3 percent in 2010, the
percentage of the working-age population holding or actively seeking a job (the labor force
participation rate) is low by the standards of developed countries (in the United States, for
example, it is 66 percent).
Part of the reason is that young people enter the job market later than in most countries
because of army service; but even adjusting for this, the rate remains low. The main reason
is that two large segments of the population have much lower rates of participation. The rate
for Israeli Arabs lags behind the national average owing to social and cultural norms that
discourage women from seeking employment. And the rate for Haredi Jews has even fallen
over the past thirty years. It was about 30 percent below the average rate in 1980 and today
(a)
(b)
(a) Compared to the rate in other developed economies in 2008, a relatively low proportion of Israel's
working-age population is employed or seeking employment, (b) but Israel's labor force participation rate
has risen in recent years. (Data: Monthly Labor Review, U.S. Department of Labor; Israel Central Bureau of
Statistics. Chart: David Rosenberg. Drawing by Bill Nelson.)
