Employment Subsidies During Crises
Employment Subsidies During Crises
Over the past year, the Israeli Institute for Economic Planning collaborated with the Ministry of Economy and Industry and the Joint Organization to explore the optimal employment model for times of crisis. This research, led by Bar Nedel, aimed to evaluate the cost-benefit of a flexible employment model compared with the "full furlough" model previously used in Israel, such as during the COVID-19 pandemic. This evaluation included various crises (security, pandemic, and economic). In this study, we analyzed the impact of an employment subsidy mechanism during crises on government spending. The findings suggest that if such a mechanism had been in place during recent crises in Israel (security, economic, and pandemic), the budgetary costs to the state would have been significantly reduced. Additionally, for future crises, the calculations indicate that a flexible employment model would lower government spending during such periods.
Over the past year, the Israeli Institute for Economic Planning collaborated with the Ministry of Economy and Industry and the Joint Organization to explore the optimal employment model for times of crisis. This research, led by Bar Nedel, aimed to evaluate the cost-benefit of a flexible employment model compared with the "full furlough" model previously used in Israel, such as during the COVID-19 pandemic. This evaluation included various crises (security, pandemic, and economic). In this study, we analyzed the impact of an employment subsidy mechanism during crises on government spending. The findings suggest that if such a mechanism had been in place during recent crises in Israel (security, economic, and pandemic), the budgetary costs to the state would have been significantly reduced. Additionally, for future crises, the calculations indicate that a flexible employment model would lower government spending during such periods.
