Israel's Economy
Two Economies: Employment Gaps
Why some groups in Israel, like ultra-Orthodox men and Arab women, have lower employment, and why this matters for long-term growth.
Israel has a dual economy.
High-tech
A small share of workers in high-tech earn very high wages.
Low participation
- Many ultra-Orthodox (Haredi) men study religion instead of working.
- Arab women have lower employment rates.
Why it matters
These groups are growing fast, so low participation could slow future growth.
Education
Haredi schools often teach little maths and English.
Policies
- Employment incentives.
- Core curriculum debates.
- Military service exemptions debated in courts.
Productivity
Outside tech, productivity is lower than in other rich countries.
The yeshiva student
A Haredi man studies full-time in a yeshiva, supported by his wife's earnings and state stipends.
Thinking all of Israel is high-tech
Much of the economy has low productivity.
Key takeaways
- High-tech is a small share of jobs.
- Haredi men and Arab women have lower employment.
- These groups are growing.
- Education and incentives matter.
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