Russians in Israel A flood of Immigrants By: Eleanor Cooper Westlake High School 9th grade (freshman) April-May 2005
The Soviet Union Comes Crashing Down • The Soviet Union disintegrated in 1989, freeing its citizens. • Economic Catastrophe • Outdated machinery • No market for many Soviet Products • Satellite countries had no guaranteed market • The Soviet Union had isolated itself from the international market
…Still Crashing… • The labor force was unskilled and unemployed • It had only traded with other countries under Soviet control • Relatively Undeveloped Infrastructure • The economy and government were making their transition from Communism to Democracy • No guaranteed source of income, benefits, education with new government The people were looking for a way out
Thesis Russian Jewish Immigration to Israel has had negative short-term effect, and an inconclusive long-term effect on the Israeli economy.
Which World? • Three possible models for the Israeli economic reaction to an influx of immigrants • The “Perfect World” • The “Compromised World” • The “Flawed World”
A Perfect World • This model reflects an ideal situation • Incorporates the influx of immigrants • Creating new jobs in the job sectors the immigrants are skilled in • Filling existing jobs • Don’t compromise existing jobs • Creates huge growth • consumption and production levels up • Wages fall in all sectors • Large pool of skilled workers from which to hire from
Occupation of Male Native Israelis and Immigrants *High Paying and Low Paying refer to professional jobs, while Blue Collar refers to unskilled workers.
There are more high-paid immigrant professionals than Israeli ones • There are less unskilled (Blue Collar) immigrant workers than native Israeli ones • Larger pool from which to choose from • Lower wages
A Compromised World • Some immigrants’ skills are not of value to the Israeli economy • Other jobs available in lower sectors to accommodate them • Down-grading or underemployment occurs • Market less efficient • Smaller economic growth than 1st model • Wages in less-skilled sector fall farther than 1st model • Wages in high-skilled sector remains constant • Not an even distribution of workers • Constrained to less-skilled sectors
Immigrants unemployment rate and participation rate is significantly higher than Native Israeli unemployment rate • The unemployment rate drops and the participation rate rises as the immigrants assimilate • Decreases in unemployment for Immigrants don’t increase unemployment for Native Israelis • Economy expanding to incorporate them
A Flawed World • Immigrants skills are of no value to the Israeli Economy • No jobs available, no jobs created • Mass state of unemployment • Skills unmarketable • Economy too rigid • Depresses Economy • Government Subsidization • Production falls • Consumption increases • Wages remain constant due to rigidity
GNP and Consumption Growth Rates per Capita The GNP growth rate remains relatively constant while the Consumption growth rate increases
Which World? • The Israeli economy best fits the “Compromised World” • Unemployment rates increase and than decrease as immigrants assimilate • Doesn’t affect Native Israeli employment rates • Though average skill level of Russian Immigrants is higher than Native Israeli, it doesn’t mean they all get jobs corresponding to their skill level.
BIBLIOGRAPHY • Brinkley, Joel. “For New Soviet Immigrants in Insrael, Hard Times.” The NewYork Times. 9, March 1991: 1,7.ProQuest Historical Newspapers. The New York Times. http://proquest.umi.com.content.lib.utexas.edu:2048/pqdweb?index=6&did=115752349&SrchMode=1&sid=2&Fmt=10&VInst=PROD&VType=PQD&RQT=309&VName=HNP&TS=1105297370&clientId=13642 • “Statistics.” Ministry of Immigrant Absorption.2004. http://www.moia.gov.il/english/netunim/stats1.htm
BIBLIOGRAPHY • “Percent of 1990+ Immigrants in Localities Numbering 100 000+ Residents.”Central Bureau of Statistics. 31, Dec. 2003. http://www1.cbs.gov.il/shnaton55/dia02_10e.shtml • Bank of Israel Research Department. One Million Immigrants- An Absorption Program. Jerusalem: Ahva Press, 1991.
BIBLIOGRAPHY • Cohen, Sarit, and Chang-Tai Hsieh. “Macroeconomic and Labor Market Impact of Russian Immigration to Israel.”2002. • Eckstein, Zvi, and Y Weiss. “On the Wage Growth of Immigrants: Israel 1990-2000.” Journal of European Economic Association. 2(4) (2004): 665-695.
BIBLIOGRAPHY • Eckstein, Zvi, and Y. Weiss. “The Integration of Immigrants from the Former Soviet Union into the Israeli Labor Market.” The Israeli Economy, 1985-1998: From Government Intervention to Market Economics, Essays in Memory of Prof. Michael Bruno. MIT Press, 2002. • “Immigration.” Jewish Virtual Library.2004. The American-Israeli Cooperative Enterprise. http://www.jewishvirtuallibrary.org/jsource/Immigration/immigtoc.html
BIBLIOGRAPHY • Greenberg, Joel. “No Milk or Honey for Israel’s Emigres.” The New York Times. 1, March 1992:8.ProQuest Historical Newspapers . The New York Times. http://proquest.umi.com.content.lib.utexas.edu:2048/pqdweb?index=18&did=116068339&SrchMode=1&sid=2&Fmt=10&VInst=PROD&VType=PQD&RQT=309&VName=HNP&TS=1105297784&clientId=13642 • Montgomery, Leland. “The Russians are Coming.” Financial World. 15, Oct. 1991: 44.Financial World. http://web4.infotrac.galegroup.com/itw/infomark/122/630/61146675w4/purl=rc1_K12G_0_A11320680&dyn=3!xrn_1_0_A11320680?sw_aep=tlc139094912