Boosting productivity in sheltered sectors is key. Current efforts to strengthen competition in these sectors, especially agriculture and banking, are welcome and should be pursued. Improvements in public transport and a more effective education system could better integrate of under-privileged groups into the labour market and increase inclusive growth.

  • Increase education funding for disadvantaged groups.
  • Develop vocational education and training for young adults.
  • Require Haredi schools to teach mathematics, science and foreign languages.
  • Cut red tape for businesses by streamlining business licensing.
  • Lift import barriers by further cutting tariffs and non-tariff measures.
  • Replace quotas, guaranteed prices and customs tariffs with direct payments to farmers.
  • Boost competition in the banking sector and efficiency in network industries. 


Productivity - Israel

Source: OECD June 2016 Economic Outlook database; OECD, Income Distribution and Poverty database; and OECD Secretariat calculations from EU-SILC – preliminary results.


Key publications

Ben-David, D. (2013), “Labour Productivity in Israel”, State of the Nation Report, Taub Center.

Giorno, C. (2016), “Boosting competition on Israeli markets”, OECD Economics Department Working Papers, No. 1287, OECD Publishing, Paris.

Bank Of Israel (2013), Annual report 2012, Box 2.1.

Bank Of Israel (2014), Annual report 2013, Box 2.1.


Institutions icon Productivity-enhancing institutions

Bank of Israel

National Economic Council

The Ministry of Finance’s initiative taken in December 2015 to create an ad-hoc Commission headed by its Director General to recommend measures to increase productivity.



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