What one quarter looks like when a labour market loses its largest employer
Most labour market changes are slow enough to argue about. This one is not.
For twenty years, roughly one in four West Bank men of working age earned their living inside the Israeli economy. In the two years to September 2023, 23.4 per cent of men aged 18 to 59 were working in Israel or the settlements on one basis or another. In the two years since the start of 2024, that figure is 9.7 per cent.
The employment rate for the same men went from 77.0 per cent to 58.0 per cent. Not the unemployment rate, which moves for many reasons, but the share of all men of working age who are doing paid work of any kind. Nineteen points, and most of it inside a single quarter between September and December 2023.
Average daily earnings across everyone in work fell from 172 shekels to 145. The ILO, working with PCBS, reports that the number of Palestinians employed in the Israeli economy fell from nearly 178,000 before October 2023 to 35,300 by the first quarter of 2025, that West Bank real GDP fell 17.1 per cent over that period, and that construction value added fell 45.3 per cent.
What makes the West Bank unusual is not that a labour market can contract. It is that the contraction arrived through an administrative decision taken elsewhere, on a single date, rather than through anything happening inside the economy.
Employers did not stop wanting the labour. Access to them stopped.
Two years on, the recovery has been partial and slow. Male employment has come back from its trough of 55.5 per cent to about 59 per cent. The share of men working in Israel has not moved much at all.
14.3% → 1.5%
If you want one number that captures the scale of what happened, it is this: among West Bank men aged 18 to 59, the share holding an Israeli work permit was 14.3 per cent in the third quarter of 2023 and 1.5 per cent at the end of 2025.
Figures are descriptive calculations from the public PCBS Labour Force Survey. ILO figures as cited.
