Israel’s Immigration Story: Winners and Losers

The exodus of Soviet Jews to Israel in the 1990s was a unique event. The immigration wave was distinctive for its large high skilled cohort, and its quick integration into the domestic labor market. Immigration also changed the entire economic landscape: it raised productivity, underpinned by the information technological surge, and had significant impact on income inequality. The extraordinary experience of Israel, which has received three quarter million migrants from the Former Soviet Union within a short time, is also relevant for the current debate about winners and losers from immigration. This paper provides a rigorous explanation for a possible link between the immigration wave and the changed level of redistribution in Israel’s welfare state.