Israel Spends Over 1.16 Billion Shekels to Incentivize Return to Work Post-Oct 7

Israel's National Insurance Institute has paid out over 1.163 billion shekels (approximately $315 million) in "return to work" grants since the October 7th Hamas attacks, according to data released three years after the event. The program, designed to encourage employees to return to their jobs after being evacuated from their homes or workplaces, benefited 73,675 workers. The grants, initially set at 3,000 shekels per month, required employees to physically attend work at least 11 days a month, excluding remote work, sick days, or paid vacation. This initiative highlights the significant disruption the war caused to the labor market, forcing the government to provide direct financial incentives to bridge the gap.

Workers who lived in evacuated communities and returned to the same employer and workplace, or those who lived elsewhere but worked in evacuated areas, were eligible. The program was extended until May 2025 for those meeting the criteria. Data shows that approximately 61% of recipients, or 44,707 workers, were in southern Israel, while 28,968 were in the north. Comparing data from the first year of the war reveals a substantial increase in total payouts despite a smaller rise in the number of recipients, indicating that many individuals received the grant for multiple months.

Beyond the general return-to-work grants, the government also implemented separate incentive programs for agriculture and construction, sectors heavily reliant on foreign and Palestinian labor. These programs disbursed approximately 29.8 million shekels to 3,949 workers in these fields. While these amounts are smaller, they represent another facet of the government's efforts to address severe labor shortages. These initiatives offered varying monthly stipends, with higher amounts for work in evacuated areas, aiming to attract Israeli workers to fill the void.

Despite these financial incentives, the effectiveness of attracting Israelis to sectors like construction has been limited. A state comptroller report indicated that efforts to encourage Israelis into construction, particularly in "wet work" trades facing critical shortages, did not yield the desired results. While thousands of Israelis joined the sector, only a fraction filled the most needed roles, suggesting that temporary financial incentives alone cannot fundamentally alter career choices or overcome challenges related to physical labor and working conditions.

In addition to return-to-work grants, the state provided other forms of financial support, including unemployment benefits and "alternative unemployment" payments for evacuees. These measures collectively underscore the extensive government intervention required to support the labor market through prolonged periods of disruption. The total expenditure on these various programs illustrates the significant economic cost of the war extending beyond direct military spending, impacting the very fabric of daily work life.