Employment and earnings mobility among income support recipients, 2005–2015

Using longitudinal administrative data, this study followed a cohort of recipients of the Income Support Benefit (ISB) in 2005, tracking their annual employment rate and earnings mobility throughout 2005–15. These trends were compared to those of two other cohorts—low-wage workers and mid-high wage workers. Our findings show that the rate of transitions between employment statuses among ISB recipients over the whole period are generally low, despite the low starting point. Also, ISB recipients showed little upward earnings mobility. Among unemployed ISB recipients in 2005, less than a third were employed in 2015, and employed ISB recipients in 2005 showed a larger decline in their employment compared to other low-wage workers. Wage mobility was also found to be lower for ISB recipients than that of low-wage workers who do not receive this benefit, in almost all indicators considered. Most ISB recipients in 2005 (employed and unemployed), who worked in 2015, had worked continuously in low-wage jobs with little or no prospects for economic progress, and only a small share of ISB recipients made the transition to mid-high wage jobs. Our results highlight that the heterogeneous groups of recipients in the Israeli ISB-system require policies that go beyond activation and work-first policies.