Patterns of Haredi Integration into the Labor Market
Author: Dr. Eitan Regev Policy Research

The full chapter can be accessed using the link on the right.

This chapter looks at the integration of young Haredim into the labor market relative to other sectors in Israel, and examines how their employment options and earning abilities differ based on factors such as education level, field of study, employment branch, and place of residence.

The first section of the chapter focuses on current trends in employment of young Haredim and finds an impressive rise in the employment rates of young male and female Haredim, within all major streams. Haredi men show higher employment rates in the periphery than in the center of the country, and in mixed cities rather than in homogeneous Haredi cities. In addition this section presents, for the first time, a high resolution map of the geographical distribution of the major Haredi streams by neighborhoods. It also reports the relative share of each stream within the Haredi sector.

The second part of the chapter compares four population groups (Haredim, National Religious, secular Jews, and Arab Israelis), and examines the relationship between education and additional background variables to employment possibilities and earning ability for each group. One interesting finding is that the employment rate of Haredi academic degree students is very similar to that of Haredi degree holders which could indicate that, for Haredi men, the decision to go to work, as evidenced by enrollment in an academic program, is no less important than the degree itself in terms of labor market integration.

Haredi integration in the labor market

  • In recent years there has been an impressive rise in the employment rates of young Haredi women and men across all Haredi streams: between 2008 and 2013, the employment rates of Haredi women and men ages 23-30 rose by 9 percentage points, reaching 73% among women and 36% among men, the largest increase across all sectors. The most significant increase was found among men and women in the Hasidic stream.
  • Employment rates of Haredi men in the periphery are higher than in the center of the country. This may be due in part to new economic realities and rising housing costs in the old Haredi centers that are incentivizing young Haredim to migrate to the periphery.
  • Haredi men living in homogeneous Haredi cities have significantly lower employment rates than those living in mixed cities. Assuming that place of residence has an impact on employment possibilities and desire to work, it is preferable, from an employment standpoint, to build Haredi neighborhoods in mixed cities rather than in homogeneous Haredi cities.

Impact of education and personal characteristics on employment prospects and wages

  • The employment rate among Haredi students is not much lower than the rate among Haredim who already hold an academic degree. In 2013, approximately 76% of Haredi men with academic degrees (ages 25-35) and 67% of male Haredi students worked, compared with only 37% of Haredi men in the same age group who never pursued higher education. This indicates that the employment level of Haredi men is more influenced by the decision to start working (and studying in higher education) than by actually earning a degree.

Haredi Employment EN (1)

  • Among Arab Israeli women, however, there is a large gap between the employment rates of those who already have an academic degree and those who are still students, indicating that, for this group, the probability of employment improves significantly with a degree.
  • The impact of parental income on the chances of obtaining a bagrut (matriculation) certificate – which greatly increases the chances of acquiring an academic education – is four times higher among the Arab Israeli population than among Jews.
  • When controlling for background characteristics (via regression analysis), the probability of young Haredi male degree holders being employed is 26.5% higher than that of those who have never pursued academic studies; for National Religious men – 17.6% higher; for secular Jewish men — 19.7% higher, and for Arab Israeli men — 13.7% higher. Compared with young women who have never studied for a degree, the probability of Haredi female degree holders being employed is 18.1% higher; for National Religious women – 18.8% higher; for secular Jewish women – 14.4% higher; and for Arab Israeli women – 44.2% higher.
  • Nearly 50% of degrees earned by Haredi men are in business administration, law and the humanities, versus 30% among secular Jewish men. In science-related subjects (engineering and architecture, mathematics and computer science), 34% of secular male academics hold degrees in those fields, versus only 25% for Haredi degree holders. That is, a larger percentage of male Haredi academic degree holders are earning degrees in areas where the market is saturated, while a lower percentage are earning higher-paying science-related degrees.
  • However, among female Haredi degree holders, 11.5% earned degrees in computer science and math, compared to only 3.6% of secular female academics.

Impact of parents’ continent of origin on young adults’ income

  • Parents’ continent of origin has a substantial impact on their children’s projected income in all sectors. When controlling for the income and education level of parents (and the mother’s education level in particular) the study finds that, contrary to popular belief, non-Haredi Jewish women whose fathers were born in northern Africa are expected to earn slightly more than women whose fathers were born in Israel. This finding may indicate that, given equal educational opportunities, ethnic wage gaps could be reduced. By contrast, males whose mothers were born in Asia (Mizrachim) may be expected to earn slightly less than those whose mothers were Israeli-born.

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