New Report Reveals: Sharp Decline of Young Haredi Men in the Labor Market

A new report published by the Chief Economist Division at the Ministry of Finance reveals concerning trends in Israel's labor market: While overall participation in the workforce among those aged 25-64 is actually increasing, among young people up to age 34 there is a decline. When examining the data more deeply, it becomes clear that one of the central factors for this decline is the change in population composition – particularly the increase in the proportion of the Haredi (ultra-Orthodox) population.

Women More, Men Less

The Haredi population, which in recent years constitutes a growing segment among young people in Israel, shows unique participation patterns – especially regarding gaps between women and men. Between 2014 and 2022, there was a 6% decrease in the participation rate of Haredi men – one of the sharpest declines among population groups. In contrast, Haredi women actually increased their participation in the labor market during the same period.

However, the rise in the percentage of working Haredi women did not manage to balance the overall picture. Since the young Haredi population is growing rapidly – and the low rate of participating men has remained unchanged and even decreased – the result is an overall decline in the participation rate of young people in general.

The report warns that these trends could worsen Israel's economic gaps in the medium and long term. If participation rates of certain groups, particularly Haredi men, do not increase – the economy could suffer a blow to growth and productivity.

Among the report's recommendations: investment in professional training and education relevant to the job market, alongside reducing negative incentives for work. This is with the goal of especially encouraging the integration of young Haredim – particularly men – into meaningful employment with economic prospects.

Another trend raising concern is the decline in Haredi (Jewish) participation in higher education. The percentage of students aged 20-24 from the Haredi community fell between 2012 and 2024 – both among women, and especially among men. This decline makes their future integration into quality employment difficult and could deepen economic and social gaps.

Economists at the Ministry of Finance point out that the growth in the proportion of sectors with low participation rates – primarily young Haredim – is expected to continue and even accelerate in the coming decades. The report emphasizes the importance of creating targeted economic incentives, especially for Haredi men, in order to change the direction of the trend and ensure a more stable economic future for the entire Israeli economy.