The hidden price of war: the careers of young people are stalling

Employment data published in recent days by the Central Bureau of Statistics and the Employment Service indicate that between one round of the war and another, the country returns to a 'war routine', and not to the routine that existed before October 7, 2023. True, from the government's perspective this is tolerable, but it is a bad routine that hinders growth and the entry of young people into the labor market, causing long-term damage to the economy and young people.

The employment rate (excluding people on unpaid leave) rose from 60.1% in June to 60.3% in July. At the peak of Operation 'Lion's Roar' in March, it fell to 51.9%. This is a return to the war routine, between 60% and 61%, but not to the 61% levels that existed before it. The employment rate, not the unemployment rate, is the figure that reflects the level of activity in the economy. Its difficulty in returning to normal is related to the high level of reserve mobilization and the crisis in the tourism industry.

The war routine is also reflected in the increase in the number of job vacancies, from 146.8 thousand in June to 148 thousand in July, an increase of 1.5% (trend data). Thus, the upward trend in the number of job vacancies continues after Operation 'Lion's Roar'. In June, the number of job vacancies rose by 5.1%. In December 2025, the number of job vacancies reached an all-time high of 153.2 thousand, even more than the peak figures from the days of exiting the COVID-19 pandemic (about 151 thousand in August and September 2022). But in March, at the peak of the war, it fell to a relative low of 125 thousand vacancies.

During the pandemic, the large number of vacancies stemmed from a mismatch between worker data and residential locations and the available vacancies. During the war, it is likely that this is due to the extensive reserve service, which affects young people and their spouses, the large departure of the young population abroad, and the ban on the entry of Palestinian workers. The recurring surge in the number of vacancies indicates the persistent difficulty in filling positions where young people are employed, as well as low-wage jobs that do not require academic training. Among other things, there are more than 14 thousand vacancies for waiters, bartenders, and cooks, about 8,700 vacancies in the construction sector, and 5,400 driver positions (a 10% increase in two months).

According to the Employment Service, the ratio between the number of vacancies and the number of job seekers stood at about 0.81 in May, meaning four vacancies for every five job seekers, indicating a tight market with high demand for workers. One of the most prominent meanings of this data is the delay in the entry of young people into the economy and a severe delay in the careers of others.

A study by the Taub Center published about two weeks ago warned that an average reservist who served more than 200 days is expected to suffer a salary decrease of about 5% for a period of five to 20 years. Fathers who served a significant period (290 to 320 days), a population of more than 100 thousand people, are expected to suffer a salary impact of at least 6%. Many thousands of reservists were absent from their workplace for a year or more in total — a huge loss in terms of accumulating professional experience and promotion opportunities, which could harm salaries in the long term by 7% or more.

In contrast, if there is a field where it is difficult to estimate the effects of the war, it is high-tech. On the one hand, according to Employment Service data, the number of job seekers who are programmers and application analysts has risen in the last two months by 9% from 7,950 in May to 8,650 in July. On the other hand, in high-tech as a whole, an increase of only 3% was recorded, meaning that in its other professions there was a decrease in unemployment. Two factors for the crisis in high-tech are the decline in the dollar exchange rate and the AI revolution, and they are not related to the war. In addition, the defense industries are absorbing many of those laid off from high-tech.