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Policy Options for Reducing Poverty and Raising Employment Rates in Israel

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  • Philip Hemmings
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    Abstract

    Welfare-to-work measures are a central theme of Israel’s labour and social policies to tackle relative poverty, which is concentrated among the Arab-Israeli and Ultra-orthodox (Haredi) communities. Policies include pilot programmes involving private-sector job placement (the “Wisconsin” programme) and an earned-income tax credit. Also, there is increased policy attention to help parents to combine work and family through improvements to daycare and early education. Microeconomic simulations of taxes and benefits suggest room for augmenting these policies with adjustments to benefits and tax expenditures. In the labour market, hiring and firing regulations are light, while the minimum-wage is relatively high in comparison with OECD countries, but it is not strongly enforced. Poverty among pensioners is set to fall in the future with the recent introduction of mandatory second-pillar pension saving. But this reform has also raised questions about the structure of tax breaks on pensions. This Working Paper relates to the 2010 OECD Economic Survey of Israel (www.oecd.org/eco/surveys/israel) Les options politiques israéliennes afin de réduire la pauvreté, et augmenter les taux d'emploi Les mesures de remise au travail sont un thème central de la politique de l’emploi et des affaires sociales d’Israël pour lutter contre la pauvreté relative, qui est concentrée dans les communautés arabe israélienne et juive ultra-orthodoxe (Haredi). Les politiques incluent des programmes pilotes prévoyant des placements dans le secteur privé (le plan « Wisconsin ») et une réduction de l’impôt sur le revenu d’activités professionnelles. Les pouvoirs publics s’efforcent également d’aider davantage les parents à concilier travail et famille en améliorant les services de garderie et d’enseignement préscolaire. Des simulations microéconomiques des impôts et des avantages fiscaux donnent à penser qu’il est possible d’accroître ces politiques en modifiant les prestations et les dépenses fiscales. Sur le marché du travail, les réglementations en matière d’embauche et de licenciement sont peu contraignantes et le salaire minimum est relativement élevé si on le compare à celui des pays de l’OCDE, mais il n’est pas strictement appliqué. La pauvreté chez les retraités devrait baisser à l’avenir avec la récente introduction de l’épargne retraite obligatoire au titre du deuxième pilier. Mais cette réforme a également soulevé des questions sur la structure des allègements fiscaux dont bénéficient les retraites. Ce document de travail se rapporte à l’Étude économique de l’OCDE de l’Israel (www.oecd.org/eco/surveys/israel).

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    File URL: http://dx.doi.org/10.1787/5kmd3kgqqmhl-en
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    Bibliographic Info

    Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 782.

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    Date of creation: 04 Jun 2010
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    Handle: RePEc:oec:ecoaaa:782-en

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    Keywords: employment; pensions; policy; tax; welfare; Haredi; Arab; Arab-Israeli; child care; benefits; poverty; labour market; Israel; Ultra-orthodox; Haredi; pauvreté; arabe-israélien; allocations; retraites; Arabes; ultra-orthodoxes; prestations; Israël; protection sociale; Politique; fiscalité; marché du travail; emploi; garde d'enfants; réformes;

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