A Peek into the State of the Nation Report 2021

The coronavirus pandemic was one of the greatest shocks sustained by Israel in recent years – economically, socially, educationally, and demographically – and its dramatic repercussions will remain with us in both the near and the far future. Moreover, the Omicron variant continues to spread, reaching a level of illness that surpasses its predecessors, and it is not inconceivable that other variants await us in the coming years, around the world and in Israel. The Taub Center’s recently-published State of the Nation Report 2021 offers an opportunity for an in-depth examination of our current status, the changes that have occurred, and the difficulties we face — and to consider the manner in which  the pandemic will be dealt with going forward. In this article, we aim to give you a glimpse of the Report, and invite you to continue reading it on the Taub Center website.

Israel’s economy has experienced tremendous disruption, but a close examination of macroeconomic trends by Prof. Benjamin Bental and Dr. Labib Shami testifies to a much faster-than-expected recovery: GDP per capita has essentially returned to the level that would have been anticipated had there been no pandemic, and Israel’s economic recovery has increased governmental revenues and helped reduce the deficit. Israel’s decline in GDP per capita in 2020 was 5.7% — close to the OECD average. According to OECD estimates, Israel should have returned to its GDP per capita level of the fourth quarter of 2019 only in early 2022, but the economy’s speedy recovery brought it to that level by the second quarter of 2021.

As noted, the economy gradually recovered in 2021 and the labor market started adjusting to the new reality. Despite the recovery, however, Israel’s unemployment rates are still higher than they were in 2019, and it appears that a return of unemployment to its low pre-pandemic level will take several years. The chapter by Michael Debowy, Prof. Gil Epstein, and Prof. Avi Weiss looks at how Israel’s economy has fared in terms of employment levels and work hours in various sectors, and paints a kaleidoscopic picture of differences by gender, sector, and geographic district. Their analysis indicates that, while predominantly “public” sectors such as healthcare, education, and public administration suffered almost no damage, other sectors such as trade, accommodation and food services and, in particular, tourism, were hit hard by the crisis, and their recovery lags behind that of the rest of the economy. Employment has recovered in the Tel Aviv, Central, and Haifa Districts, but has remained stagnant in the Jerusalem, Northern, and Southern Districts. Additionally, many workers in certain industries have switched to working from home, and this change seems to be a permanent one.

The study on healthcare conducted by Prof. Nadav Davidovitch, Dr. Baruch Levi, and Rachel Arazi looks at Israel’s health workforce and at how the country is coping with the pandemic. It also addresses technological developments that emerged during the pandemic, with an emphasis on home hospitalization and digital medicine, and on the immunization program, in light of socioeconomic disparities. Their research indicates that, despite a 26% increase in the number of Israeli physicians between 2000 and 2019, Israel’s physicians per capita figure is below the OECD average. The consequent overburdening of the medical staff during the pandemic has led to increasing burnout, especially among personnel treating Covid-19 patients. The study also reports a huge upswing in remote medical services and their use in Israel’s healthcare system over the past two years. According to an OECD study, Israel’s level of telemedicine penetration within the healthcare system is among the world’s highest.

The study also found a positive correlation between Covid-19 vaccination rates and socioeconomic status, in contrast to routine vaccinations. Vaccination rates were observed to rise along with socioeconomic status for each age range above 20. Vaccination gaps are evident in the lower socioeconomic clusters, not just in terms of delaying the third dose but also in refusing it altogether. That is, Israel’s socioeconomic disparities are also manifesting themselves in the pandemic’s impact on the population at large, and that impact may be expected to persist, given the disease’s long-term physical, mental, and socioeconomic effects.

The Taub Center’s recently-published State of the Nation Report provides a research response to the needs of the hour — coping with the Covid-19 pandemic — while embodying a continued commitment to researching long-term trends in Israeli society. Within its pages, you will find additional studies on the pandemic’s demographic and social aspects, alongside other works on the economy, the labor market, healthcare, welfare services, education, and demography. There are also executive summaries of research conducted in these diverse fields over the past year.