On Monday, Amir Yaron, the Governor of the Bank of Israel, highlighted the importance of investing in the education system of the country for improving human capital.
The governor said that young people are one of the main growth drivers of a country’s economy. He spoke at a conference conducted by the research department of the central bank on the labor market and human capital.
Boosting human capital
Yaron further said that the central bank was working on submitting updated recommendations to the incoming government that would help boost human capital.
The governor said that if Israel wants to narrow the gaps that exist between it and other advanced economies, then investment in early education is a must.
This was in terms of labor productivity, skills, and the incidence of poverty and income inequality. Yaron said that Israel had one of the highest rates of educated people amongst developed countries.
But, he added that students did not have many achievements in the education system as compared to the rest of the world.
He also said that the workers in the economy also possess a lower level of basic skills than the average seen in the Organization for Economic Co-operation and Development (OECD).
He said that the gaps in skills begin at an early age, so it is understood that the treatment should also come at a young age to ensure it does not persist and the gap should not grow at later ages.
The remarks from the central bank governor come amidst concerns of former and current education officials about the right-wing, religious coalition.
They are worried that Haredi parties would be granted unprecedented authority related to ultra-Orthodox education and education of non-core subjects would receive greater funding.
Meanwhile, the Noam party’s Avi Maoz is aiming towards authority over the educational programming of schools in Israel and has also been focusing on the anti-LGBTQ agenda.
In addition, there have been rumors that a deal has been made to increase the stipends paid to yeshiva students by the state, who do not work and spend their days studying instead.
Prof. Michel Strawczynski, the Director of the Research Department of the Bank of Israel, also spoke at the conference.
He said that neither students nor adults from Israel had scored well in international tests that focus on basic knowledge associated with main fields related to the labor market.
He further said that the composition of the population is also going to change in the next thirty years, which is another challenge because weaker groups will grow in number and make up a big part of the working-age population.
He said that the biggest challenge facing the economy was providing young people with the environment that could help them acquire the tools needed for dealing with challenges in the future.
Strawczynski said that this included helping them obtain knowledge in professions related to high technology industries.
He said that policy tools and reforms were required for changing the direction and this was something that the new government should do.