Palestinian employment in the Israeli economy during the COVID-19 crisis


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·         Reported Palestinian employment in the Israeli economy declined sharply during the COVID-19 lockdown in the spring of 2020.  Between January and April, the number of employee posts held by Palestinians declined by 64 percent (about 68,000 posts).  Reported Palestinian employment began to recover in May, and returned to its precrisis levels in September.

·         More than two-thirds of the decline in employee posts (about 47,000 posts) occurred in the construction industry, alongside a decline of about 51,000 posts held by Israelis in the industry.  Combined, these declines were reflected in a decrease of about 35 percent in the number of employee posts in the industry between January and April 2020.  This decline reflected various constraints that made it difficult for Palestinian laborers to enter Israel, and for activity in the industry, even though the industry was exempted from the lockdown.  The employment of Israelis in the construction industry has not yet returned to its precrisis level.

·         Targeted surveys conducted during the crisis among Palestinian laborers who worked in Israel at the start of the year (prior to the crisis) show that only about 22 percent of them continued to work in Israel in April, and that the wages and scope of employment of those who continued to work declined moderately.  By August, more than half of Palestinian workers who were employed in Israel at the start of the year were re-employed, and their monthly wages were lower than at the beginning of the year, due to the low number of work days in August.

·         According to a targeted survey, most of the workers employed in Israel in August stayed overnight in Israel for at least part of the month.  About half of all workers noted that their employers provided them with reasonable or good sleeping and hygiene conditions, and only a few noted that they had bad sleeping and hygiene conditions.  The creation of reasonable residential arrangements for Palestinian workers in Israel is expected to make it easier for some of the employment in Israel to continue even in cases when movement restrictions between Israel and the Palestinian Authority are required due to morbidity.

 

Palestinian workers were employed in about 24 percent of employee posts (wage slips) in the construction industry in Israel in 2019, and in about 18 percent of posts in the agriculture industry.[1]  Employment in Israel is critical for the Palestinian economy.  According to Palestinian Central Bureau of Statistics (PCBS) estimates, about 17.8 percent of Palestinian employees who lived in Judea and Samaria in 2019 were employed in the Israeli economy, while the daily wage in Israel (NIS 254) was more than double the daily wage in the Palestinian economy in Judea and Samaria (NIS 128.6).  As such, about 36 percent of the total wage of Palestinian residents of Judea and Samaria came from employment in Israel.[2]

 

The scope of reported Palestinian employment in Israel declined sharply due to the spread of the COVID-19 pandemic and the health lockdowns in Israel and in the Palestinian Authority.  The number of employee posts held by Palestinian workers in the Israeli economy that were reported by Israeli employers declined by about 64 percent—about 68,000 posts—from January to April (Figure 1).  The decline in Palestinian employment within sovereign Israeli territory was sharper than the decline in employment in Israeli communities in Judea and Samaria due to the requirement that those working within sovereign Israeli territory not return to their homes in the Palestinian Authority for a number of weeks, which did not apply to those working in Judea and Samaria.  In addition, their entry into sovereign Israeli territory was approved only during specific windows of time.  These requirements were intended to lower COVID-19 contagion between Israel and the Palestinian Authority.  Alongside these data, which indicate a decline in reported employment of Palestinians in Israel, PCBS data indicate a parallel decline in the number of those employed without a permit from about 22,700 workers in the first quarter to about 15,300 workers in the second quarter of 2020.

 

Starting in May, following the first lockdown, reported Palestinian employment in Israel began to recover, and by September, it reached its level from the beginning of the year.  At the same time, according to PCBS estimates, the number of workers with no permit increased to about 30,000 by the third quarter of the year.



[1] If we include nonreported workers (who are illegally in Israel), the rate of Palestinian employment as a share of employment in Israel is slightly higher.

[2] The calculation of the total wage was based on the micro data file from the survey and takes into account the wage distributions and work days of workers in Israel and in the Palestinian economy.