This report presents a cost-benefit analysis of the Eshet Chayil program implemented by the Ministry of Labor and Social Affairs (MOLSA) to integrate into employment women who are outside of the labor market and do not receive an income support benefit.
The report examines cost-benefit from the perspective of the economy (increased resources available to society), of the government (net budget savings), and of the participants (improved financial status). The literature generally regards the economy (society) as the main perspective.
The estimate of benefit is based on the program's assessed impact on the women's employment integration. It emerges from a comparison between their integration and that of similar women who did not participate. The data on the participants were taken from the program database, and on the comparison group – from Labor Force Surveys of the Central Bureau of Statistics (CBS). The estimated final impact was calculated by means of Coarsened Exact matching (CEM). We also relied on assumptions concerning factors that could not be assessed accurately due to data limitations.
From the perspective of the economy, two years after participants began the program – the average benefit per participant exceeded cost. For participants from Arab society, the net benefit (benefit minus cost) was some NIS 6,150; for Israeli-born Jewish participants – some NIS 5,250; for Ethiopian-Israeli women – some NIS 7,300.
From the perspective of participants, benefit exceeded cost since the participants' wages when they did work were higher than the costs involved in going to work. Participation does not involve payment from participants.
From the state budget perspective, the cost (investment in the program) was greater than the benefit (savings to the budget). The government bore the cost of the program and did not save on expenses since the program, as said, is not directed at recipients of income support benefits. Only a few participants reached a wage level liable for income tax. Some participants integrating into employment were eligible for an employment grant.
The evaluation did not take into account elements difficult to assess in terms of financial value, such as the program impact on the participants' families or its long-term impact after two years.
The study was initiated and funded by MOLSA. The findings are already helping the ministry intensify its efforts to examine the effectiveness of its programs. More generally, they are contributing to the economic assessment of employment programs in Israel.
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