Summary

Survey of the Financial Situation of Workers in Israel: Two Years and Three Months After the Outbreak of the War against Hamas

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Photo by Miriam Alster/FLASH90

Introduction

The present survey is the fourth in a series conducted since the outbreak of the "Iron Swords" War on October 7, 2023. The aim of the survey is to assess the employment status and financial situation of Israelis who were employed immediately before the war. Specifically, it examines how many of them remain employed, how their income has changed, and how their households are faring financially. In the present survey, we repeated the same questions asked in the previous surveys, conducted in April 2025, January 2025, and January 2024, with the goal of assessing the changes relative to those surveys. The survey examined five aspects of the war’s impact on the financial situation of salaried and self-employed workers: (a) work hours or volume of business activity; (b) individual and household income; (c) liquidity; (d) loans and overdrafts; and (e) housing-related payments.

In the analysis presented in this report, comparisons are made only with the January 2024 and January 2025 surveys only, as this survey was conducted in January 2026 and thus supports a consistent appraisal of changes over time with reference to the same month in successive years, making it possible to isolate seasonal effects.

Note: this was conducted prior to the outbreak of the war with Iran.

Main Findings

This survey, which was conducted between December 2025 and January 2026, shows that even though two years and three months have passed since the events of October 7, 2023, a very high percentage of the population are still reporting that the war has harmed their economic situation. In particular, the findings show that almost a quarter of salaried workers and around half of self-employed workers say that their income has fallen as a result of the war. The survey also indicates that the incomes and work hours of the Arab population have been more severely affected than those of the Jewish population, and have even worsened compared to previous surveys. In addition, respondents who earned less than the average wage before the war report substantially larger decline in income and in work hours than those who earned above the average wage. Finally, respondents aged 20–24 report experiencing the greatest negative impact relative to all other age groups.

The current survey also indicates that self-employed workers are among the groups most severely affected. A very high percentage of self-employed workers report a decline in income and business activity, as well as liquidity problems and difficulties meeting regular payments. The fact that more than two years after the events of October 7, about half of Israel’s self-employed are still reporting a negative impact on their business activity and liquidity highlights that the economic damage caused was severe, with a significant number of self-employed workers struggling to recover even after a considerable period has elapsed.

Among the working Jewish population, there were no significant changes in most economic indicators relative to the previous surveys conducted in January 2024 and January 2025, and there was even a very slight improvement in their financial situation. This improvement is reflected in a moderate decline in the share of those reporting a reduction in their work hours or business activity, household income, and financial liquidity. However, more than two years after the events of October 7, more than a quarter of Jews still report that their household income has been negatively affected. Thus, the improvement recorded in this survey, which is limited in scope, does not indicate a significant change relative to the situation in January 2025, but rather a stabilization of the severity of the impact.

In contrast to the Jewish population, the current survey shows a deterioration in the economic situation of the Arab population relative to previous surveys. Larger shares of Arabs report a reduction in their work hours or business activity, personal income, and household income, as well as difficulty in meeting housing payments. In other words, compared to previous surveys, there has been an increase in the proportion of those who report a negative impact on the main indicators of their economic situation. This deterioration is particularly notable given the relative stability found over the same period in the Jewish population, and it highlights the vulnerability of Arab households. In this context, it should be noted that a significant portion of the Arab population are employed in economic sectors that have been particularly affected by the war, primarily construction and agriculture.

In addition, an inverse relationship was found between level of income prior to the war and the severity of economic impact: the lower the level of income, the larger the share of respondents reporting a decline in income, a reduction in work hours, and a lack of financial liquidity. This finding indicates that the economic damage caused by the events of October 7 remains particularly severe among low-income households.

As in previous surveys, the current survey found a particularly significant impact on the youngest age group (20–24), reflected in a high percentage reporting that their wages and number of work hours have declined. These are ages when a significant portion of the Jewish population is still in regular military service or has been drafted into reserve service, and therefore it is reasonable to assume that a significant proportion of salaried employees in this age group are employed in temporary work, whether they are students or recently discharged soldiers, or belong to the Arab population. In addition, occupations in the tourism, recreation, and leisure sectors, which have been significantly affected by the war, are characterized by a relatively high concentration of young workers, which also helps explain the severity of the impact on this age group.

These findings demonstrate the need to create and strengthen relevant economic support mechanisms that target the groups most significantly affected by the war. In particular, attention should be given to the Arab population, young workers, and households with incomes below the average wage. The findings of the survey emphasize the need for focused and sustained policies that will help stabilize the economic situation of households affected by the extended period of war, and prevent further exacerbation of existing economic inequalities.

The following is a summary of the main findings:

Employment status

  • The majority of salaried workers who were employed when the war broke out (91%) were still salaried workers at the time the survey was conducted (January 2026), while a relatively high percentage (5%) reported that they have been dismissed or put on unpaid leave, around 3% have changed their status from salaried to self-employed, and around 2% were in reserve service.
  • The majority of self-employed workers (87%) have remained self-employed, though a considerable proportion (around 9%) have become salaried employees. Some 3% reported that their business has closed—a similar share to that found in previous surveys (2%).

Reduction in work hours or volume of business activity

  • Around 17% of salaried workers reported a reduction in work hours, by an average of 46% relative to before the war.
  • The share of young salaried workers (aged 20–24) who reported a reduction in their work hours was the largest of all the age groups at 37%, slightly lower than the 40% found in the January 2025 survey. Among Jews, the share of young people who reported a reduction in work hours due to the war was relatively low at 22%, compared to 69% among young Arabs.
  • 38% of workers whose salary was below the minimum wage before the war reported a reduction in work hours, compared with just 13% of those who were earning NIS 28,000 before the war (2.5 times the average wage).
  • The share of Arab salaried workers reporting a reduction in their work hours has grown, from 37% in the January 2025 survey to 46% in the current survey (January 2026), contrasting with a fall in the corresponding share of the Jewish population.
  • The impact on Arab salaried workers has been particularly harsh, with 46% having experienced a reduction in work hours, by an average of 54% relative to before the war. These findings indicate a clear worsening compared to the January 2025 survey, when 37% reported a reduction in work hours, by an average of 51%.
  • Around half of self-employed workers (49%) have suffered a decline in their volume of business activity, compared to just 17% of salaried workers who reported a reduction in work hours.
  • The scale of the reduction of business activity among self-employed workers relative to before the war is 48% on average, similar to the scale of the reduction in work hours among salaried workers (46% on average).
  • On the other hand, there has also been a rise in the share of self-employed workers who reported an increase in their volume of business activity: from 4% in January 2024 to 8% in January 2025, and now up to 12% in January 2026.

Decline in income from work

  • A high proportion of workers have not been able to recover financially from the impact of the war: Though more than two years have passed, 27% of respondents are still reporting that their wages or personal income from their business are lower than in the pre-war period, and a further 2% say that they have no income at all—the same percentage found in the January 2025 survey.
  • More than half of self-employed workers (53%) say that they have not yet returned to the level of income they had before the war: The share of self-employed reporting that they have no income at all from their business (7%) is significantly larger than the corresponding share of salaried workers (1%). In addition, the share of self-employed workers reporting that their personal income from their business is lower than before the war (46%) is more than double that of salaried employees who reported a decline in wages (23%).
  • The share of those reporting that their income has declined as a result of the war remains similar to that found in the January 2025 survey, in which 52% of self-employed workers and 25% of salaried workers reported a fall in income—raising concerns that this is a new static situation, in which the population affected by the war is left behind and unable to recover.
  • The average decline in personal income from business among the self-employed (41%) is sharper than the decline in wages suffered by employees who reported a decline (33%).
  • A relatively large proportion of low-income earners reported a fall in their income: 41% of respondents whose income was below the minimum wage before the war reported a decline in income or said that they had no income at all, compared to 31% of those whose income was between the minimum wage and the average wage, and 18% to 26% of those who had an income above the average wage.
  • The impact on wages or income from business is particularly severe among Arab respondents: More than two years since the beginning of the war, 54% of Arabs still report that they have no income or a lower income than before the war, compared to 23% of non-Haredi Jews and 18% of Haredim.
  • The share of those who reported that they have no income at all or that their income is lower than before the war is noticeably larger in economic sectors that were severely affected by the war, led by construction and agriculture (54%), and the recreation, tourism, culture, and leisure industries (47%). These percentages are even higher than those recorded in the January 2025 survey (43% and 31%, respectively).

Decline in household income

  • More than two years since the beginning of the war, 33% of respondents still say that their household income is lower now than before the war.
  • Around half of self-employed workers (49%) reported that their household income is still lower than it was before the war, compared to around 30% of salaried workers.
  • More than half (56%) of Arabs reported that their household income is still lower than before the war, compared to around 28% of Jews. This share of Arab respondents is similar to that found in the January 2025 survey (55%), and higher than that found in the January 2024 survey (51%).
  • A notably high proportion (45%) of those who were earning minimum wage or below before the war reported that their household income has declined, while only 11% reported an increase in income.
  • Cautious optimism: Looking forward to the next three months, the share of respondents who think that their financial situation will be restored to its pre-war level, or will even be better than it was then, is now 69%, compared to 51% in the January 2025 survey, and 52% in the January 2024 survey.

Household liquidity

  • Approximately two years and three months since the outbreak of the war, around a quarter of all respondents report that they have no liquid funds at all, while 8% estimate that their funds would last less than a month.
  • Around half of respondents estimate that their household’s available funds would last more than a month.
  • Particularly high proportions of Haredim (33%) and Arabs (38%) reported that their households have no liquid funds at all, indicating a liquidity problem in these sectors.
  • 41% of those who were earning minimum wage or below before the war reported that they have no liquid funds at all, while 15% said that their funds would last less than a month, and fully 18% selected the “don’t know” response.
  • Some 31% of respondents reported that they have taken out an overdraft or increased their overdraft since the war began. The share of these respondents is particularly high among Arabs (55%), compared to 25% of Jews.

Difficulties meeting housing payments

  • The large majority of respondents (75%) did not report experiencing difficulty in meeting their housing payments (mortgage or rent).
  • However, around a quarter said that since the war began, they have struggled to meet their mortgage payments—a slightly lower proportion than found in the January 2025 survey, when it stood at 27%.
  • The situation is particularly dire among Arabs, with 61% reporting difficulty in meeting housing payments, compared to 28% of Haredim and 21% of non-Haredi Jews—even higher than the corresponding share of Arabs found in the January 2025 survey, of 57%.
  • The proportion of respondents who asked for leniency from their lenders and did not receive it has risen from 28% in January 2024 to 33% in January 2025 and now to 38% in January 2026.

We hope that the findings of this survey, which was conducted as part of a continuing effort to track the economic effects of the events of October 7 and the Iron Swords War on the employment and financial situation of the working population, will help decision-makers in designing and directing economic aid so that it reaches those population groups that have been most severely affected.

 

About the Survey and the Sample

The survey was conducted using a representative sample of the population of workers in Israel (both salaried and self-employed)[1] who were in employment as of October 6, 2023, on the eve of the war. There were a total of 1,193 respondents to the survey, of whom 1,007 were salaried employees before the war and 186 were self-employed. The maximum sampling error is ±2.84% at a confidence level of 95%.

Questionnaire design and survey analysis was carried out by the research staff of the Israel Democracy Institute's Center for Governance and the Economy, with advice and support provided by IDI's Viterbi Family Center for Public Opinion and Policy Research. Data collection was performed by CI Marketing Information between December 22, 2025 and January 14, 2026, around two years and three months after the beginning of the Iron Swords War. Interviews were conducted via the internet and by telephone, with 957 men and women interviewed in Hebrew and 236 in Arabic.

 

 

[1] In this survey, “self-employed” refers to those who were working before the war and did not declare in the current survey that they have closed their business or were on reserve duty, while “salaried” refers to those who were working before the war and did not declare in the current survey that they were on reserve duty or unpaid leave, or have resigned or been fired.