The proportion of work hours lost in Israel between the second and fourth quarters of 2020 represented 8.2% of total work hours, according to the Chief Economist of the Ministry of Finance. The proportion of work hours lost in in the OECD was 7.6% and in the EU 6.8%, the Ministry of Finance adds, meaning that Israel was worse hit in terms of unemployment than most developed countries by the Covid crisis. Israel was ranked 16th out of the 27 OECD countries in terms of the proportion of work hours lost.
The Ministry of Finance Chief Economist also found that the Covid pandemic caused far more unemployment than the more recent economic crises in Israel. The level of employment in Israel fell 7.9% in 2020 compared with 2019, while between 2000 and 2003 (the second Intifada and the bursting of the dot.com bubble) it fell by only 1.7%, and in 2009 following the sub-prime financial crisis it fell by only 0.9% from 2008.
The Ministry of Finance Chief Economist found no hard evidence to suggest that it was Israel's government payments policy for those on unpaid leave, which resulted in Israel being so hard hit by Covid-19 in terms of unemployment.
The report said, "At least in theoretical terms, there should not have been a substantial influence on the aggregate number of hours in the short term, when there are claims in both directions about the influence, if at all."
Published by Globes, Israel business news - en.globes.co.il - on June 9, 2021
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