Unemployment is near a record low but more university graduates are looking for work
The share of university graduates among Israel's job seekers has risen from 14% in August 2022 to 20.5% this August, even as the economy-wide unemployment rate remains around 3%. The trend has been particularly pronounced among software developers.
The proportion of university graduates among all job seekers surged by 46%, rising from 14% in August 2022 to 20.5% in August 2026. This occurred despite an exceptionally low economy-wide unemployment rate of around 3%. The phenomenon is part of a broader trend that has characterized Israel's labor market over the past four years, according to the Employment Service's "Labor Market Pulse" report for August.
The share of unemployed university graduates stood at 18.6% in May this year, climbed to 19.7% in June and 20.3% in July, and reached 20.5% in August. One factor behind the increase is rising unemployment among software developers. The number of job seekers in the software development and application analysis sector rose by 6.4%, from 8,350 in June to 8,900 in August.
The increase was likely driven in part by the seasonal phenomenon of summer layoffs among ultra-Orthodox female teachers. However, the rise in the share of unemployed graduates also reflects a longer-term trend: the rate stood at 14% in August 2022, 16.7% in August 2023, 19% in August 2024 and 19.6% in August 2025.
The growing vulnerability of traditionally stronger segments of the workforce is also evident in an analysis based on socioeconomic clusters. The share of job seekers from the highest-ranking clusters, 8-10, stood at 16.8% in August 2023 and rose to 20.6% in August this year. By contrast, the share of job seekers from the lowest-ranking clusters, 1-3, fell from 41.2% in August 2023 to 37% this year.
The impact of summer layoffs, in which employees are dismissed during the school break to reduce salary costs and subsequently claim unemployment benefits, also changes the gender and sectoral composition of the job-seeking population. Because those laid off for the summer primarily work in education and supplementary education, the number of female job seekers rose from 96,200 in July to 97,900 in August. Their share of the total job-seeking population increased from 56.8% to 58.5%.
That figure is expected to fall back to around 54% in October, once the women laid off for the summer return to work.
The phenomenon of summer layoffs among junior academic staff has declined significantly in recent years, meaning the practice now disproportionately affects the ultra-Orthodox sector. The number of ultra-Orthodox job seekers rose by approximately 7.9%, from 15,000 to 16,100.
Among job seekers from the Arab community, the number fell by about 4.3%, while there was no change among non-ultra-Orthodox Jewish job seekers.
