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The Jerusalem Post

Being fired decreases your salary by 26% over 11 years, Finance Ministry reveals

 
A beggar sits and asks for money amid the coronavirus crisis, Jerusalem, 2020 (photo credit: MARC ISRAEL SELLEM)
A beggar sits and asks for money amid the coronavirus crisis, Jerusalem, 2020
(photo credit: MARC ISRAEL SELLEM)

The chances of an employee who has been fired being hired decrease by 25% in the first year after they are fired, and drop 7% in the long-run.

The yearly income of workers in Israel who are fired drops by 45% in the year after they have lost their jobs, according to research released by the Finance Ministry Wednesday, which is the first in a three-part series.

Yearly income for these workers recovers over the subsequent years following their firing, but a gap of 10-20% remains 10 years after their firing, the ministry found.

These hits to their income translate to a 26% income loss in the 11 years following their firing, the report found.The chances of an employee who has been fired being hired decrease by 25% in the first year after they are fired, and drop 7% in the long run.

The research also found an increase in the income of the partner of the employee who was fired, which is similar to what is seen in the literature in other countries.

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 THE ISRAEL Tax Authority is apparently interpreting ‘mail’ to include email and downloads from the Internet.  (credit: OLIVIER FITOUSSI/FLASH90)
THE ISRAEL Tax Authority is apparently interpreting ‘mail’ to include email and downloads from the Internet. (credit: OLIVIER FITOUSSI/FLASH90)

Comparison to Europe

This increase in income for partners is only statistically significant in the short run and only partially compensates for the loss of income from their partner’s firing.

The short-run damage to fired employees is slightly higher in Israel than in a number of European countries when compared to similar research on firings. In the long run, the damage is similar.

The research was completed using an analysis of mass firing events between 1999 and 2009. 

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