education should strive to creativity and critical thinking
Posted on Jun 16, 2018 by Ifi Reporter
The economy continues to grow at a rate of 3.5-4% per annum; In contrast to previous years, when growth was based on private consumption, growth is now more balanced: exports and investments also contribute to growth.
Growth is expressed in continuous demand for workers, and the economy is in a full employment environment with a tight labor market; Unemployment is low in all sectors and at all levels of education; Wages are rising among all population groups; And a manpower constraint is the limit most companies report that restricts them from expanding their operations. Using the Beveridge curve it is possible to assess whether labor market trends reflect a cyclical, or structural change. We are at the upper left of the curve, ie, in continuous cyclic improvement, but the curve also moves towards the origin of the axes, so that structural unemployment has decreased. This is apparently the result of the improved efficiency of job search processes and the relative attractiveness of the labor market (partly due to the tougher unemployment benefits and the reduction in allowances made at the beginning of the previous decade)
Low inflation is not the result of weak demand, and is on the rise. Macroeconomic policy continues to support economic activity: the Bank of Israel interest rate continues to be low, and action is taken to return inflation to the target range and to support economic activity; Fiscal policy also expands, as reflected in the relatively high level of the cyclically adjusted deficit by international standards.
In a long-term perspective:
The policy adopted in 2002-2003, in which subsistence allowances were reduced and criteria for receiving unemployment benefits were tightened, increased participation in the labor force, including those with low employment rates, particularly Arab women and ultra-Orthodox men. At the same time, employment rates among these populations are still particularly low, and the rise in employment among Haredi men has been halted in recent years.
The increase in employment rates in low-income populations is reflected in an increase in the number of employed persons per household among the lowest quintiles, from 1.2 in the early 2000s to about 1.6 in 2016. In addition, the rise in employment rates among the lowest quintile was reflected in a marked increase in the rate of income from work out of the total income of households in the lowest quintile, from about 35% in the beginning of the 21st century to 61% in 2016. However, alongside the decrease in allowances, this increase reflects mainly an increase in labor input, while the differences in hourly wages between workers in the bottom quintile and the upper quintile remained very high, and significantly higher than in any other country in the OECD.
The net income inequality indices and the poverty indices rose in the years following the cut in transfer payments, and began to decline as of 2010, with the increase in income from work resulting from the increase in labor input among the population at the low income level. It should be noted that the decline in poverty rates occurred despite an increase in the level of the poverty line itself, which reflects the relatively sharp rise in median income in recent years. Even after the decline, the poverty rate among persons in Israel is the highest in all the OECD countries. Poverty is very high among the Arab and ultra-Orthodox populations, and unlike in the past, there are even families with two earners who are poor.
A significant proportion of those who joined the labor force are low-skilled workers, and as a result, those with limited earning capacity. As a result, there has been a marked increase in poverty rates among families with two earners: among the Arab population, 15% of the families with two earners are below the poverty line, and among the haredim it is much higher - 27%!
At the same time, it is important to note that in some of these families, they are breadwinners who work part-time jobs, and the size of the family requires a larger income in order to escape poverty.
The high rate of low-wage workers reflects to a large extent the fact that the level of productivity, ie the product per work hour, of a large proportion of workers is relatively low. While GDP per capita grew from the beginning of the millennium at a rate similar to that of the OECD average, and the rate of participation in the labor force rose even slightly, the product per hour worked rose at a moderate rate that did not reduce the gap between us and the OECD average. An industry analysis of the gap in labor productivity between Israel and the average of the OECD countries indicates a large gap in almost all sectors of the economy except for industries that focus on exports, ie, are directly exposed to competition from the world.
Looking ahead, the challenge of increasing productivity is also expected to intensify in view of the slowdown in the growth of world trade, which is counter-productive to global growth, and in view of the local factors that are expected to restrain growth, first and foremost the contribution of the increase in the number of years of schooling and demographic trends.
A variety of studies point to three groups of factors in the differences between us and countries with higher levels of productivity: inferiority in the quality of human capital, inferiority in the quality of physical infrastructures, and a clearly unfriendly business environment. The literacy skills gap, the quantitative ability, and the functioning of the digital environment between us and the OECD average are prominent in each educational group, and are also prominent among population groups. In the PISA tests, which indicate the future gap in skills, the achievements of Israeli students are lower than the average in the OECD countries, and Israel is markedly poorer in terms of gaps in scholastic achievements. The weakness of these skills of a large part of the population is expected to impede future integration into employment, especially when processes such as digitization, the automation of workplaces, and the use of artificial intelligence reduce and reduce demand for workers in routine jobs and manual labor, while demand for analytical work Higher cognitive level and creativity are growing and are likely to continue to grow.
Against this backdrop, it is clear that only inclusive and sustainable growth, based on a continuous increase in productivity, will result in a continuous rise in the standard of living and a reduction in gaps and poverty. Such growth requires:
Improving human capital:
• While the increase in the number of years of schooling, as close to exhaustion, should improve the quality of education and provide basic skills to all parts of the population.
• The education system should strive to impart skills and skills such as self-learning, problem solving, creativity, and critical thinking.
• In view of the particularly low achievements of students from a weak background, and the low expenditure per pupil in PPP terms in international comparison, there is room for additional budget that focuses on affirmative action without harming the rest of the students. • The addition of teaching hours coupled with the incentives of quality teachers to teach in the periphery (geographic and social) is an effective way to improve the achievements of students from a weak background. Vocational training, including in the technological fields Active policy in the labor market and adaptation of the policy tools to each population group, in order to continue the integration of the various populations in the labor market Removing barriers to growth and productivity תכנון Long-term planning and removal of barriers to investment in infrastructure (primarily public transportation in metropolitan areas). • Improving regulation and reducing bureaucracy. • Promote competition where necessary. • Promoting reforms (ports, electricity, gas and energy). At the same time, even under conditions of sustained growth, the reduction of poverty requires treatment of populations that are able to integrate into employment, and their earning ability is limited. • Encouraging employment, even among populations whose employment capacity is limited, through appropriate incentives, in particular, the reduction of the tax inherent in benefits for people with disabilities, and raising the retirement age. • Elderly: • Adjustment of the retirement age to an increase in life expectancy, particularly raising the retirement age for women. • In the long term - the compulsory pension law acts to reduce poverty among the elderly; In the short term - raising income supplement for low-income elderly. • Low working / earning capacity at working age: • Raising the work grant. • Improving training and placement services. • Improving unemployment benefits that will enable the search for suitable work. • Increasing income support alongside improving employment efficiency tests. In conclusion, the good condition of the Israeli economy must be exploited in order to address the long-term challenges that will contribute to more balanced, sustainable and inclusive growth. In view of the global and local trends that will weigh on growth in the coming years, the need for a policy to encourage productivity and reduce the moderating effects of these processes becomes more acute. In 2015, shortly after its establishment, the government adopted strategic goals in a number of areas, including the cultivation and utilization of human capital, including: 21st century skills, improving efficiency and mobility among the training and education systems, increasing integration in employment in the economy by, inter alia, Employment. The test will be to translate the objectives into a work plan and to implement it in a way that will advance the achievement of the goals set.