One-fifth of Israelis displaced by war out of work, survey shows

Tens of thousands of Israelis are evacuated from towns near the Gaza and Lebanese borders following attacks

A helicopter transports hostages who were released from captivity in Gaza as part of hostages-prisoners swap and a ceasefire deal between Hamas and Israel, in Tel Aviv, Israel Feb 22, 2025. REUTERS/Ronen Zvulun

One-fifth of Israelis who were forced to evacuate their homes after the Oct 7, 2023 Hamas attack have lost their jobs, the Israel Democracy Institute said on Tuesday, underlining the broader cost to the Israeli economy from the war in Gaza.

Tens of thousands of Israelis were evacuated from towns near the Gaza and Lebanese borders following the attacks, which were immediately followed by missile barrages from the Iranian-backed Hezbollah movement in southern Lebanon.

Most spent months living in temporary accommodation 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.

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 Hezbollah bombardment were still deserted.

But 19 percent of those in employment before the war were out of work when the survey was conducted, according to the survey by the IDI, highlighting the cost to an economy that grew by just 1 percent 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, where economic activity in businesses, tourism and the agricultural sector was severely impacted.

The Bank of Israel said in October that the sharp slowdown on 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 defence and a shortage of labour in key sectors including construction.

Tens of thousands of Palestinian workers who lost their jobs after Israel closed the borders to them at the start of the war have also remained unemployed, putting pressure on the strained finances of the Palestinian Authority, which has also lost large slices of its tax revenue.