The Young Unemployed and Unemployment Benefits in Israel
Author: John Gal and Shavit Madhala-Brik
April 03, 2016
Recently proposed changes to Israel’s Unemployment Insurance Law and their implications for the young and unemployed
Unemployment insurance is intended to help those who are temporarily unemployed to maintain their standard of living while encouraging them to return to the labor market. The rate of young adults under the age of 30 who receive unemployment benefits in Israel is about 16%. The past few years have witnessed a number of changes to the unemployment benefits program, some of which have worked against the younger age groups. Most recently, there has been a proposal that would make entitlement even more difficult for younger adults who find themselves unemployed, due to a tightening of the qualifying period requirement (the amount of time one must work in order to be eligible for unemployment benefits). In the proposal, the qualifying period for a young adult under 30 would be 24 months of employment out of the 30 months preceding unemployment; the qualifying period for an individual between the ages of 30 and 35 would be 18 months out of the preceding 24 months. This comes in place of the current qualifying period requirement which is the same for all ages and requires an employment period of 12 months within the 18 months preceding unemployment.
This policy brief discusses the relevant Israeli law and the changes that have been proposed with respect to younger unemployed people, and compares them to the provisions for older people and to accepted practice in other social welfare countries. Our findings show that while the envisioned change would undoubtedly bring about a budgetary savings, it would nevertheless alter the entitlement conditions for young adults in Israel in an unprecedented way relative to other social welfare countries. What is more, the change would widen existing disparities between older and younger Israeli adults in terms of their entitlement to unemployment benefits. It is estimated that if this change is adopted it will affect about 15% of the young and unemployed (about 11,000 people), and that the impact on women, those with families, and Arab Israelis will be particularly severe. In light of this, the proposal would undoubtedly disrupt, to a substantial degree, the desired balance between the functions and aims of unemployment insurance.