Press Release: The Ability to Work from Home among Workers in Israel

Under embargo until Tuesday (17.11) at 6:00 AM

The coronavirus crisis has forced many businesses in Israel and all over the world to adopt a model that allows workers to work from home. A new Taub Center study conducted by researchers Shavit Madhala and Professor Benjamin Bental looks at Israeli workers and the characteristics that increase their ability to work from home as well as those that make it less possible to do so. The findings show that workers with a low ability to work from home include 16-25-year-olds, those with low education levels, Arab-Israelis, the self-employed, and those living in socioeconomic weaker residential areas or in the North. The data point towards a potential widening of gaps between workers, a finding that highlights the importance of increasing the use of digital technology, primarily among weaker populations, in order to strengthen their ability to work from home.

Advances in information and communication technology expanded the potential to work from home even before this pandemic. On average, about 5.3% of workers in Europe worked from home in 2019, while in Israel this figure stood at only 4.4%.

The outbreak of the coronavirus accelerated the move to remote work particularly during the lockdown. However, even when the lockdown was lifted, many workers, fearing exposure to the virus, continued to work from home in order to avoid traveling to work and meeting with coworkers. This accelerated the move towards working from home in many countries: in the US, 35% of the labor force are working from home and in the Netherlands, that figure is 50%.

In Israel, according to a survey that covered about a third of the employees in the labor force, about 21% of workers worked from home during the first lockdown. The rate was especially high in high tech and the finance and insurance industries (49% and 41%, respectively), however,  immediately upon relaxation of the restrictions these rates began to fall across all industries, decreasing to about 17% in May and 10% in July. Despite the decline, the high tech industry has embraced working from home relatively widely, and in July, about 27% of their workers were still working from home. About 24% of businesses invested in improving their infrastructures, allowing greater accessibility for workers working from home.

The ability to work from home in the Israeli labor market

This study estimates the ability of workers to work from home on the basis of data from the PIAAC survey (Survey of Adult Skills of the OECD), which includes worker and occupational characteristics. Job task traits related to the ability to work from home were divided into three categories: tasks requiring physical and manual skills; those requiring social interaction (face-to-face work); and digital work.

The first two categories involve skills that are difficult to carry out from home while the third improves the ability to work from home. Relative to other developed countries, the Israeli labor force is characterized by a high ability for workers to work from home, with the average ability of an Israeli worker being about 0.17 standard deviations higher than the OECD average.
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Taub Center researchers found that workers in prestigious occupations with high hourly wages have the highest potential for work from home, although managers, who have the highest hourly wage, are less able to work from home than are academics, engineers and technicians. This finding reflects the high level of social interaction in their jobs. In contrast, occupations involving office work, although characterized by relatively low hourly wages, are among the occupations with the greatest potential for work from home.

Examples of occupations with a greater ability to work from home include program developers and analysts, registrars, authors, journalists, communication workers, and the like. Examples of occupations with lower ability to work from home include, for example, workers in the fitness industry, workers in the food industry, workers in construction, and salespeople.

An examination by industry shows that in information and communications, finance and insurance, and professional services, both scientific and technical, there is a high potential for working from home. In contrast, in wholesale and retail trade, construction, and accommodation and food services, the potential for working from home is particularly low, as predicted by the statistical model. Data from a Central Bureau of Statistics (CBS) survey in July on Businesses During the Coronavirus reinforce these findings.
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The strong get stronger: Non-Haredi Jewish workers from strong municipalities have the greatest potential to work from home

To understand the gaps among workers in Israel and the potential for remote work, Taub Center researchers examined workers’ sociodemographic characteristics, including variables such as age, gender, and residential area. The researchers found that women have a greater potential to work from home than do men, including those with children under the age of 6. This finding appears to stem from their choice of employment that allows them to work from home. Women tend to have jobs that are far less physically demanding, as well as those requiring less social interaction than men, but they also do less digital work in their jobs.

Compared to non-Haredi Jews, Arab Israelis were found to have a lower ability to work from home, while the gap between Haredim and non-Haredi Jews was not statistically significant. An interesting finding is that relative to non-Haredi Jews, gaps in digital work were found both in the Arab and Haredi sectors, but were highest among Haredim. Jobs that are physically demanding were more prevalent in the Arab sector, and low among Haredim.

In a breakdown by age, clear gaps in the ability to work from home were found only between 16-25-year-olds and 56-65-year-olds; older adults have higher ability to work from home since they generally perform tasks that are not physically demanding and require less social interaction. It was also found that workers ages 26 to 45 use more digital means than those ages 16 to 25.

Workers in the central area of the country have a greater ability to work from home than do workers in the North. Those who work outside of their residential area also have greater potential to work from home relative to those who live close to their place of work, and they also tend to do more digital work. It seems that those who are able to work from home are also more able to choose to live farther away from their workplace. This indicates potential reductions in traffic congestion and pollution as a result of the expansion of the work from home option.

The ability to work from home also rises with education level, and it is higher among salaried workers than among the self-employed.

The explanatory variables studied explain 44% of the variance in the ability to work from home, and the main variables influencing the ability to work from home – occupation and industry – are responsible for about 70% of the explained variance.

The share of workers who can work from home is low, but there is potential for expansion

Taub Center researchers used the model and data from the July CBS survey (a period of no lockdown) to estimate the share of workers who can work from home, and found it to be at least 6%. This low rate is based on data from 2015 and reflects an average over all industries including those with no ability to work from home, like accommodation and food services as well as health and welfare services, and those industries with high ability to work from home, like information and communication and financial services, where almost one-fifth and one-quarter, respectively, can  work from home.

Despite the high ability to work from home in these industries, their share in employment in the workforce is relatively low (about 6% for information and communication and 3% for financial services). In contrast, public administration employs about 10% of the labor force, and about 14% of these employees can work from home. Industries that represent about a third of the employees in the economy – trade, education, health and welfare services – are characterized by a low portion of workers who can work from home.

“Expanding the ability to work from home has advantages that will impact the economy and the labor market, such as lessening traffic congestion and pollution, narrowing gender gaps, expanding employment opportunities for those in the periphery, increasing labor productivity, and even reducing costs for employers,” explains Professor Benjamin Bental.

“It seems that working from home is a privilege that primarily benefits workers of higher socioeconomic standing, an advantage they have in normal times as well as in times of crisis,” adds Shavit Madhala.

Taub Center President Professor Avi Weiss summarizes: “The limited ability of workers from weaker populations to work from home is likely to expand existing gaps in the labor market, and given the limitations on employment during this crisis, these populations are especially vulnerable at this time. Nevertheless, this crisis can be seen as an opportunity to invest in ways that will allow the economy to reap benefits for years to come.”

The Taub Center researchers conclude that it is important to invest in skills that enable workers to work from home with assistance packages focused on the particular characteristics of each group. The government can assist in expanding the possibilities of working from home by upgrading internet infrastructures in weaker areas, advancing remote work models among public sector employees, and encouraging businesses to adopt remote work models through economic incentives.

 

The Taub Center for Social Policy Studies in Israel is an independent, non-partisan socioeconomic research institute. The Center provides decision makers and the public with research and findings on some of the most critical issues facing Israel in the areas of education, health, welfare, labor markets and economic policy in order to impact the decision-making process in Israel and to advance the well-being of all Israelis.

For details, or to arrange an interview, please contact Anat Sella-Koren, Director of Marketing, Communications and Government Relations at the Taub Center for Social Policy Studies in Israel: 050-690-9749.