According to experts, the Arab economy in Israel is plagued by a lack of Hebrew skills, high crime rates, and subpar public transportation. A recent event sought to find a solution.
Poor public transportation, limited Hebrew-language skills, and persistent violence in Israel’s Arab communities are among the main factors driving economic inequality between Israel’s Jewish and Arab populations, experts said at a conference on Thursday.
The event, titled “Employment and Equal Opportunities for Young Men and Women in Arab Society,” was hosted by the Center for Economic Policy of Arab Society Quality, in partnership with the Aharon Institute for Economic Policy at Reichman University’s Tiomkin School of Economics and the Yad Hanadiv Foundation.
Panels explored a wide range of obstacles to economic growth in the Arab sector. These included low levels of social cohesion and unequal access to public transportation. Speakers also discussed strategies to strengthen Arab representation in business and industry.
In addition, they outlined the joint plan of Yad Hanadiv and the Authority for Economic Development, which aims to increase earned income for individuals in Arab society and reduce the gap with non-Haredi Jewish communities. Central to the plan is expanding access to quality employment and developing human capital within the Arab sector.
UNIVERSITY OF HAIFA Arab Israeli students take time out on campus. (credit: UNIVERSITY OF HAIFA)
The significance of the conference
“The annual conference of the Center for Economic Policy of Arab Society at the Aaron Institute is a major policy event that defines direction and not just floods problems. It is an expression of the center’s role as a leading knowledge body, which translates economic research into feasible national goals. As part of a joint strategy with the Yad Hanadiv Foundation and in close cooperation with government ministries, we have formulated long-term goals until 2035 on the continuum of education, training and employment, which will serve as a compass for all intervention programs and the basis for allocating government budgets in the coming years,” Dr. Marian Tahoucho, Head of the Center for Economic Policy of Arab Society told The Jerusalem Post.
She continued, “The uniqueness of the conference is that it sets a practical vision for the life of a young Arab man or woman, from school, through training and higher education, to quality integration into the labor market and a decent salary. The very meeting between the Budget Division, the Ministries of Labor and Education, the Council of Ministers, the Economic Development Authority, local authorities, and civil society organizations allows for a direct and binding discussion on the question of how to move from planning to actual implementation.”
She added that the conference was taking place at a “critical juncture, with the end of the five-year plans and the upcoming new government decisions” and “against the backdrop of worsening violence and crime and the challenge to the legitimacy of investment in the economic development of Arab society.”
Stressing that the work at the institute validated data-based policy, she celebrated that it had already made waves by increasing women’s employment, improving eligibility for matriculation, and expanding integration into academia.
EAST CITY women want to work, earn money and improve their living conditions (Illustrative). (credit: MIRIAM ALSTER/FLASH90)
Economic inequality in numbers
Currently, the average earned income of Arab workers aged 25 to 44 is NIS 6,450 per month, less than half that of non-Haredi Jews, who earn an average of NIS 13,900 per month. The plan aims to raise the average Arab income to NIS 11,400 by 2035 and reduce the income gap with non-Haredi Jews by 11 percent.
Another of the collective aims is to see the Arab employment rate, which was 79 percent for men and 49 percent for women as of 2022, rise to 86% and 84% by 2035. A significant part of achieving that goal is to increase the share of Arab men with post-secondary education from 22% to 36% over the next 10 years.
One of the key barriers to higher earnings is limited access to higher education, partly due to declining Hebrew literacy. Dr. Varda Ben-Shaul of Malag Vatat told thePost that the Hebrew skills of the current generation are weaker than those of the previous generation, making it difficult for young people to pursue specialized degrees or enter STEM fields.
Data presented at the conference showed that 40 percent of Arab men and 47 percent of Arab women have Hebrew skills at an intermediate level or below. Additionally, only 50 percent of men and 70 percent of women are eligible for the bagrut exam. Of those, only 60 percent of men and 50 percent of women scored above the minimum requirement.
“There is also a very significant potential, mainly among women, to raise employment rates even without additional education. That is, even among academics, employment rates of Arab academic women are still lower than those of Jewish academic women,” said Dr. Marian Tahoucho, Head of the Center for Economic Policy of Arab Society. “Therefore, a very large part of the increasewill not only come from investment in education but also from creating opportunities in the labor market to integrate them into employment.”
A push towards entrepreneurship
Discussing how to promote entrepreneurship in Arab society, Tahoucho said there must be a focus on digital skills, particularly artificial intelligence. She also noted that a first step toward achieving the goals would require improvements and investments in Arab education at every stage of formal and informal schooling, from kindergarten onward.
That investment should include the formal introduction of spoken Hebrew as a core subject in schools, with increased exposure to the language through digital tools and Hebrew-speaking teachers. Preparatory programs, gap-year initiatives, or civic service frameworks that offer workshops and courses may also be beneficial, she advised, providing students with opportunities to engage in community development and vocational training.
Shira Berliner Poleg, acting director of the Governmental Institute of Technological Education and Training in the Labor Ministry, added that another issue impacting students was crime in Arab societies.
Thousands attend a protest against the violence in the Arab community, in Tel Aviv. January 31, 2026. (credit: YONATAN SINDEL/FLASH90)
The climbing crime rates
The murder rate in the Arab-Israeli community has risen to the third worst in the developed world, according to data published by the Taub Center. The number of homicides in the Arab population stood at 220 in 2024, while it stood at 58 among the Jewish Israeli population.
Poleg said it was important to remember that it is not only those who are murdered who are affected, but also those related to and living near the victims. One researcher described offices being closed down after someone was murdered outside the building.
Countless studies have connected economic hardship to crime. Further limiting opportunities and thereby creating economic hardships in Arab communities is the issue of travel infrastructure in Arab neighborhoods.
Sunny Ziv, a senior researcher at the institute, stressed that, beyond human capital, employment options also depend on physical access. Citing data published in 2012 and 2020, it was claimed that a 1-2% increase in income follows a 10% improvement in public transportation access.
Train stations, which offer an affordable and efficient way to travel between cities, are often located outside Arab localities or do not exist at all, the researcher claimed. As a result, transportation accessibility in Arab localities is significantly lower than in Jewish localities, limiting access to employment centers.
Gaps in transportation accessibility translate into an average monthly income loss of approximately ₪769 for men, and ₪531 for women, he said.
Yuval Barnea contributed to this report.