The Impact of Artificial Intelligence on Israel’s Labor Market

Artificial intelligence (AI)-particularly Generative AI -has the potential to raise productivity but could reshape workplaces across sectors. Using occupational microdata, this paper assesses the potential impact of Generative AI on Israel’s labor market and benchmarks it against selected European economies. The results indicate that most Israeli workers are likely to benefit from AI adoption. However, about one-fifth of the workforce faces high exposure with low complementarity, indicating their vulnerability to displacement. To assist workers at risk of job displacement, a comprehensive lifelong learning strategy—including reskilling, upskilling, and mid-career training—is essential.