The labour market of Israeli Arabs: Key features and policy solutions

CEPR Policy Insight No 78

Nasir Kasir, Eran Yashiv

The situation of Israeli Arabs in the labour market draws considerable attention in the public discourse in Israel, especially in the economic debate, due to both their large share of the population and their incomplete integration in the labour market. An analysis of this situation indicates that Arab men retire from work at a relatively early age and that only a fifth of Arab women participate in the labour force. There are high unemployment rates, especially among the less educated. Those who are employed are concentrated mainly in lowskilled industries, where wages are relatively low. The fortunes of workers with a higher education are also less favourable. Some work in occupations that do not fit the subjects they have studied, while others deliberately avoid studying fields where their chances of employment are low. Most workers with a higher education are employed in the public sector and only a small minority are employed in advanced industries, such as high-tech firms.