1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Policy Options for Reducing Poverty and Raising Employment Rates in Israel

Welfare-to-work measures are a central theme of Israel’s labour and social policies to tackle relative poverty, which is concentrated among the Arab-Israeli and Ultra-orthodox (Haredi) communities. Policies include pilot programmes involving private-sector job placement (the “Wisconsin” programme) and an earned-income tax credit. Also, there is increased policy attention to help parents to combine work and family through improvements to daycare and early education. Microeconomic simulations of taxes and benefits suggest room for augmenting these policies with adjustments to benefits and tax expenditures. In the labour market, hiring and firing regulations are light, while the minimum-wage is relatively high in comparison with OECD countries, but it is not strongly enforced. Poverty among pensioners is set to fall in the future with the recent introduction of mandatory second-pillar pension saving. But this reform has also raised questions about the structure of tax breaks on pensions. This Working Paper relates to the 2010 OECD Economic Survey of Israel (www.oecd.org/eco/surveys/israel)

English

Keywords: pensions, policy, labour market, tax, poverty, Israel, welfare, Arab, Arab-Israeli, Haredi, child care, employment, Ultra-orthodox, benefits
JEL: J81: Labor and Demographic Economics / Labor Standards: National and International / Labor Standards: Working Conditions; I32: Health, Education, and Welfare / Welfare, Well-Being, and Poverty / Measurement and Analysis of Poverty; J61: Labor and Demographic Economics / Mobility, Unemployment, Vacancies, and Immigrant Workers / Geographic Labor Mobility; Immigrant Workers; J28: Labor and Demographic Economics / Demand and Supply of Labor / Safety; Job Satisfaction; Related Public Policy; H24: Public Economics / Taxation, Subsidies, and Revenue / Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes; I30: Health, Education, and Welfare / Welfare, Well-Being, and Poverty / Welfare, Well-Being, and Poverty: General; J14: Labor and Demographic Economics / Demographic Economics / Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination; H: Public Economics; H55: Public Economics / National Government Expenditures and Related Policies / Social Security and Public Pensions; H53: Public Economics / National Government Expenditures and Related Policies / National Government Expenditures and Welfare Programs; J32: Labor and Demographic Economics / Wages, Compensation, and Labor Costs / Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions; I38: Health, Education, and Welfare / Welfare, Well-Being, and Poverty / Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs; J65: Labor and Demographic Economics / Mobility, Unemployment, Vacancies, and Immigrant Workers / Unemployment Insurance; Severance Pay; Plant Closings; J82: Labor and Demographic Economics / Labor Standards: National and International / Labor Standards: Labor Force Composition; J38: Labor and Demographic Economics / Wages, Compensation, and Labor Costs / Wages, Compensation, and Labor Costs: Public Policy
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