Reforms to increase labor productivity over time – The school vacation structure in Israel and its ramifications on the labor market
- A survey conducted by the Bank of Israel among parents of preschool and lower grade school children shows the possibility that the structure of school vacations in Israel has an adverse impact on labor productivity in the economy. About half of respondents said that the vacations have a detrimental impact on their work, more than 15 percent reported that they or their spouses have taken their children with them to work, and 5–11 percent reported that they or their spouses have taken time off from work without taking vacation days.
- About half of the respondents supported the idea of greater synchronization between school vacations and the common workdays in the economy through cancelling school on Fridays and making existing vacation days in the school system regular school days. Fifteen percent of respondents were opposed to the idea.
- If school is cancelled on Fridays, the demand for paid extra-curricular frameworks for young children on those days (“Friday care”) could reach about half of the relevant households.
- Implementing a synchronization program may have a positive effect on labor productivity. Thirty-one percent of respondents believe that it will have a beneficial effect on them at work, and just 8 percent believe that it will have a detrimental effect on them.
During school vacation days on which work places operate as normal (the days following holidays, Lag BaOmer, Chanuka, the vacation week before Passover, and the summer vacation), working parents are forced to find care arrangements for their small children. These arrangements may entail the parents’ absence from work or interruption of their workday, leading to an adverse impact on their labor supply and labor productivity. According to previous Bank of Israel estimates, the impact to GDP is on the order of about NIS 2 billion per year at least.
In Israel, the number of school vacation days that are not vacations in the rest of the economy is high by international comparison. At the same time, and as opposed to other countries, the education system in Israel operates six days a week. The idea was therefore raised to cancel school on Fridays together with shortening school vacations during the year and shortening the summer vacation.
A survey conducted recently by Kobi Braude and Yossi Margoninsky of the Bank of Israel Research Department among parents of preschool and lower grade school children in the Jewish population shows that the structure of vacations in the school system does have an effect on parents’ work. About half of the respondents said that the vacations have a detrimental impact on them at work. In addition, more than 15 percent of respondents or their spouses took their children to work with them during those days, and between 5 and 11 percent of respondents or their spouses took time off from work without taking vacation days.
The survey also found that about half of parents support the idea of improved synchronization between the structure of these vacations and the workdays common in Israel, with the cancellation of school on Fridays and holding classes on days that are currently vacation days in the school system. About one-third of respondents believe that the implementation of this idea will have a beneficial impact on their functioning at work, only 15 percent of parents are opposed to the program, and an even smaller percentage believe it will adversely affect them at work. These findings are consistent with the assessments that the implementation of the idea will increase the labor productivity of the parents, as well as GDP, without any additional budgetary cost.
Regarding the Bank of Israel’s proposal to establish enrichment programs for kindergarten and lower grade school children on Fridays at the parents’ expense (“Friday care”), about one-third of parents responded that they would use such programs, and about one-third said that they would not. If the remaining third of respondents is distributed along the same lines, about half of all parents of children at the relevant ages would send their children to Friday care programs.
The survey also showed that 77 percent of those supporting the synchronization program would continue to support it even if work from home is allowed during the school vacation days, and just 2 percent of supporters would oppose it under such circumstances. The two main reasons given for continuing to support the program were that it is difficult to work from home when the children are on vacation, and that they would like the children to have a framework during those days.
In conclusion, the findings of the survey show that the idea, which is expected to contribute to increased labor productivity without budgetary cost, has broad support. Looking more broadly, the proposal can be included among additional reforms to increase productivity—one of the main long-term challenges facing the economy.
 The detailed proposal can be found in “Characteristics of School Vacations in Israel—Costs to the Economy and Policy Alternatives” at https://www.boi.org.il/he/Research/DocLib1/pp-201911h.pdf (in Hebrew).