One-fifth of Israelis displaced by war have lost their jobs, survey shows

One-fifth of Israelis who were forced to evacuate their homes after the October 7, 2023, Hamas onslaught are out of work, the Israel Democracy Institute said on Tuesday, underlining the broader cost to the Israeli economy from the 15-month war in Gaza with the terror group.

Tens of thousands of Israelis were evacuated from dozens of communities near the Gaza border in the wake of the Hamas assault from Gaza. Some 60,000 more were also evacuated from communities near the northern border when the Lebanese terror group Hezbollah began firing rockets at Israel in solidarity with Hamas on October 8, amid fears they could try and replicate the Hamas assault.

Most spent months living in temporary accommodation, including in hotels across Israel, helped by government subsidies that added to the billions of dollars spent on the military during the war, but away from their jobs and livelihoods. The government has spent more than NIS 9 billion ($2.5 billion) on the evacuation of Israelis since the October 7 attack, with some NIS 6 billion going to payments to hotels and property owners.

Just over a third (39%), had returned to their homes, according to the survey, conducted in December and January by the non-partisan IDI think tank, while most of the areas in the north that were subjected to months of incessant rocket fire from Hezbollah in southern Lebanon were still deserted.

But 19% of evacuees in employment before the war were out of work when the survey was conducted, according to the IDI report, highlighting the cost to an economy that grew by just 1% in 2024. Another 3% were called in to reserve military duty.

Around a third of Israeli households have reported a fall in their incomes since the start of the war, a proportion that reached as high as 44% among households in the north and south, where economic activity in businesses, tourism and the agricultural sector was severely impacted. The national average is 35%.

A man surveys damage caused during the recent war in Metula, on the Israeli border with Lebanon, January 2, 2025. (Yossi Zamir/ Flash90)

“The fact that around 15 months since the outbreak of the war, a majority of self-employed/freelance evacuees are still reporting a decrease in the scale of their business activity due to the war highlights the urgent need to create a clear and ordered mechanism that will provide an immediate response to this population group during emergency situations, such as wars, pandemics, and other extreme events that are beyond their control,” said authors of the IDI report Daphna Aviram-Nitzan and Omer Cohen.

Aviram-Nitzan and Cohen said the mechanisms should be “similar to the existing mechanisms for assisting salaried workers, who in times of crisis are entitled to a security buffer, whether by means of [providing] unpaid leave or receiving unemployment benefits.”

The Bank of Israel said in October that the sharp slowdown in economic activity in northern areas of Israel as a result of the war would add to the pressures on an economy already squeezed by higher spending on defense and a shortage of labor in key sectors including construction.

Israel and Hezbollah agreed to a ceasefire deal in November, and Israel completed its withdrawal from southern Lebanon last week, except for 5 strategic outposts where troops remained.