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Israel: Selected Issues
Author:
International Monetary Fund. European Dept.
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Series:
IMF Staff Country Reports
Volume/Issue:
Volume 2015: Issue 262
Language:
English
Publication Date:
16 Sep 2015
DOI:
https://doi.org/10.5089/9781513594675.002
ISBN:
9781513594675
ISSN:
1934-7685
Pages:
69
Keywords:
ISCR; CR; Israel; price; pay; productivity; productivity growth; income inequality; price boom; wage income; product market; income of woman; growth equation; goods export boom; inequality in Israel; Housing; Housing prices; Inflation; Labor productivity; Income; Global; Western Europe
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This Selected Issues paper examines labor productivity in Israel. Israel’s GDP per capita is low relative to the United States despite high labor input, as labor productivity is low. Catch-up of labor productivity to the United States stopped in the 1980s and relative labor productivity has since declined. Low labor productivity is the result of a low capital-to-labor ratio—kept low by high employment growth—and low total factor productivity growth. The latter may reflect lack of competition and product market restrictions, which are among the highest in advanced economies. Boosting competition, lowering product-market restrictions, and improving the quality of education and infrastructure would help boost productivity.
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Cover IMF Staff Country Reports
IMF Staff Country Reports
ISSN:
1934-7685
Publisher:
International Monetary Fund