The labour market of Israeli Arabs: Key features and policy solutions

The labour market outcomes of Israeli Arabs, who are mostly Muslim, are negative in terms of participation, employment, and wages. There is a significant gap between their outcomes and those of the majority in Israeli society. CEPR Policy Insight 78 shows that government policy may make a big difference through investment in education, active labour market policies, physical infrastructure, tax and benefits reform, and anti-discrimination legislation and enforcement. The estimated rate of return on these policies is relatively high. And the lessons to be learned could be applied to other Muslim minorities.