|SOCIAL IMPACT BONDS||
EMPLOYMENT OPPORTUNITIES FOR ARAB CITIZENS OF ISRAEL
The Arab population of Israel is expected to constitute 20% of the total population of the state by 2020. Of this significant proportion, 50% of Israeli-Arabs live in poverty, compared with 20% of all Israelis, while the socio-economic gaps between Jews and Arabs have continuously widened each year since 2006.
These gaps are reflected in Arab workers' wages that are, on average, 61% the amount earned by Jewish workers. The employment rate reflects these gaps too, standing at 41% among Arabs, compared with 59.6% among Jewish Israelis.
Female-Arab participation is the workforce is especially low, with only 21% of women working, compared with 57.9% of Jewish women. In the Israeli civil service sector, only 5.8% of employees are Arab. All in all, the lost potential to Israel's economy as a result of the failure to utilize the potential of Arab male and female workforce amounts to NIS 31 billion a year, according to 2006 data.
In order to tackle the low employment rates within this community, Social Finance Israel aims to launch a Social Impact Bond in order to increase employment opportunities for Arab citizens of Israel. This bond will provide capital to not-for-profit organisations that can increase these employment rates.
When employment rates within the Arab community in Israel are increased, the government enjoys a direct economic benefit, as a result of a reduction in welfare support spending, an increase in tax revenue and a growth of GDP.