Israeli Young People and Small-Business Owners Will Be Especially Harmed by Pandemic’s Aftermath, according to Social Policy Researchers

There I will provide for you – for there are yet five years of famine to come – that you and your household and all that is yours may not suffer want.




(the israel bible)

December 30, 2020

5 min read

The lack of economic and social security in Israel will continue for a long time to come as a result of the COVID-19 pandemic, even after its impact on the population’s physical health has dissipated. So predicts a 9,000-word chapter on “The Social Welfare System and the Coronavirus Crisis” in the just-released State of the Nation Report 2020 of the non-partisan, non-profit Taub Center for Social Policy Studies in Israel ( 


“After two years of stability with no major initiatives in social welfare policy in Israel, this year of the coronavirus crisis has led to a dramatic change in the response to social problems. The protective measures taken against the pandemic and the accompanying mass unemployment created economic and social distress among many groups in Israeli society. It is already clear that the crisis has increased levels of poverty and inequality, which were already high prior to the crisis, and for the foreseeable future, the unemployment rate is expected to continue to be much higher than previously.”


The center in an independent institution based in Jerusalem that conducts high-quality socioeconomic research and develops innovative, equitable and practical options, striving to influence public policy through direct communications with policymakers and enriching public debate on the issues.


The chapter on social welfare was written by Prof. John Gal, chairman of the Social Welfare Policy program and a principal researcher at the center who teaches at the Hebrew University’s Paul Baerwald School of Social Work and was its dean; and Shavit Madhala, a researcher in social welfare and the Israeli labor market at Taub, with a master’s degree in the research track of the Environmental Economics and Management Department in the university’s agriculture faculty.  


The report was edited by economics Prof. Avi Weiss, president of the Taub Center. Other chapters in the expansive report cover the country’s health system, educational system, labor market, effects on the economy and trends and characteristics of physicians and their training. 


One of the groups most affected by the pandemic, Gal and Madhala wrote, is young adults, and the government’s solutions for them are insufficient. “In Israel, as in the rest of the world, the young are the main casualty of coronavirus induced unemployment. This is due to their relatively weak position in the labor market, their tendency to be employed in sectors that have been particularly affected by the crisis, and the lack of an economic cushion in the form of savings.”


Although expenditure on social security and on social welfare grew significantly in 2020, social investment programs for increasing providing opportunities for suitable jobs such as the expansion of vocational training and employment support, were promised, but have not been implemented significantly, the authors continued. 


“The economic recession that resulted from the pandemic and the massive unemployment that accompanied it have had a deleterious effect on the incomes of hundreds of thousands of families over a period of many months. The main victims are populations with a weak labor market status who have few support systems and little economic cushion,” and this is particularly true of younger workers. In addition, the social distancing and quarantines that has been imposed on various groups, especially the elderly, the ill and those with serious disabilities, has worsened their distress. 

The amount of poverty and inequality – two facets of Israeli society that were exceptionally high before the crisis – will become more severe, the researchers wrote. “Even the modest budget that was allocated for investment, such as vocational training and expansion of employment programs aimed at specific populations, has hardly been used, despite the declarations of economic policymakers.” Israel’s unemployment insurance program – which was the main “safety net” before the crisis –

was “lean” even before the pandemic and offered “limited protection and support to the unemployed.”


“Unlike Israel, in which workers on unpaid leave received unemployment insurance, in the social democratic welfare states (Sweden and Denmark), in the conservative welfare states (Germany and France), and even in the UK, greater emphasis was placed on compensation through employers,” the researchers wrote. “In these countries, part of the employees’ wages were paid for even during their leave of absence from work, in order to maintain the continuity of their link with the labor market. Thus, for example, in Denmark, the state covered 75 percent of the salaries of furloughed employees if the company was forced to reduce its total manpower by at least one-third, while in Germany the Kurzarbeit program allows businesses to reduce the work hours of their employees (instead of firing them), and in exchange, they receive government funding in the amount of 60 to 70 percent of the salaries for the work hours that were cut, which is then passed on to the worker.” 


A prolonged slump in employment, and the employment of young adults in particular, “will have long-term effects, such as a reduction in employment experience and pension savings,” the chapter continued. The effects on freelancers and small business owners will be particularly severe, due to both the effects of the economic slowdown and the lockdowns and the fact that they are not covered by the unemployment insurance program. 


At the same time, there was a large increase in domestic violence during the crisis. The economic difficulties resulting from the lack of employment, the increased violence within the family due to financial difficulties and lockdown, and the difficulties facing the elderly in need of assistance who cannot leave their homes are reflected in the number of active welfare cases. Dealing with the new clients and the needs of those with disabilities, the sick, and the elderly confined to their homes or who live in institutions but are cut off from family support systems, has resulted in a particularly heavy workload for social workers and for the non-profit organizations that provide assistance or implement social programs. 


The reduction in income as a result of the crisis has had an effect on the standard of living of much of the population, as well as on their fears for the future and their emotional state. Fully 21 percent of the respondents or someone in their household cut back on their food consumption or their number of daily meals as a result of the crisis. Here also the effect on the Arab Israeli population has been greater. In the Arab Israeli sector, a large share of the respondents — almost 20 percent — reported that their economic situation is particularly grave, relative to about seven percent in the Jewish sector, according to Gal and Madhala. 


The Taub Center researchers concluded that “the long-term effects of the crisis on the Israeli welfare state and on the welfare of its citizens are difficult to predict; but there is no doubt that they are largely dependent on the social policies that will be adopted by the government both during the crisis and after it has passed. In any case, any retrenchment of welfare budgets due to the pandemic and it repercussions, or because of political instability and the lack of an approved state budget for 2020, is likely to further hurt those vulnerable populations, who will most need support as the crisis continues and in its aftermath.”




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