Per capita GDP in Israel is much lower than in most developing countries, amounting to 74% of the average for the G7 countries. For the working population only, however, per capital GDP is nearly $55,000, ahead of countries like Switzerland, Sweden, Britain, and Japan. The Center for Social Policy Studies in Israel published these figures in it its report for 2000.
The report states that the figures indicate that Israel’s unique age distribution, with high proportions of children and senior citizens, is a major reason why the country lags behind Europe in per capita GDP.
Another key factor in Israel’s low per capita GDP is the proportion of participation in the labor force. In the 25-54 age bracket, which accounts for a major part of the labor force, this ratio is only 70%, compared with over 80% in the Organization for Economic Cooperation and Development (OECD) countries.
The study also indicates that Israel currently devotes 75% of its employment policy spending to unemployment insurance, and only 25% to labor incentives. In OECD countries, labor incentives have been rising since 1993, and currently account for 40% of total government spending in the labor market. Israel allocates 0.4% of GDP to labor incentives, compared with an average of 1.1% in the European Union countries.
Unemployment rates in Israel were much higher than in most OECD countries in 2000. Israel’s unemployment was similar to that of the Czech Republic and Germany, and is currently around 10%.
The figures on long-term unemployment, however, paint a more serious picture. In Israel, as in the European OECD countries, 45% of the unemployed have been out of work for over a year.
The gap between the ratio of employment of men and women has fallen drastically in recent decades. In Israel, the gap is 17%, similar to Switzerland, Britain, and the US, and lower than the OECD average.
Published by Globes [online] - www.globes.co.il - on January 12, 2003