Artificial intelligence is shaking up employment and making many employees around the world feel terrified of being made redundant. A study by the Taub Center for Social Policy Studies in Israel has objectively scrutinized how AI is reshaping the composition of the unemployed in Israel.

The researchers – Michael Debowy, Prof. Gil Epstein, and Prof. Avi Weiss – found that while AI’s impact on overall unemployment remains limited, it is already changing who becomes unemployed. AI explains part of the shift in the occupational distribution of the unemployed between 2022 and 2025, particularly since the second half of 2024.

They found that its impact is concentrated in occupations that previously enjoyed very strong demand, low layoff rates, and persistent vacancies. These occupations, which had especially low unemployment rates in 2022, are now experiencing the most pronounced increases in relative unemployment.

Epstein, head of the labor market policy program at the Taub Center, explained: “The era of hi-tech workers’ immunity is over. Our data shows that AI is ripping the cards. It explains about a fifth of the increase in programmer unemployment and locks the door mainly on young people. While veteran staffers become more efficient with the help of the machine, the ‘juniors’ are the first to pay the price. Those who wait for a change and don’t rush to upgrade their skills here and now will simply be left behind.”

Ironically, it will probably not affect lower-status blue-collar workers, including barbers, garbage collectors, plumbers, house painters, firefighters, and others who studied more like midwives, landscape artists, emergency medical technicians, and acupuncturists, whose jobs involve hands-on interaction with others.

But it could significantly impact bookkeepers; lawyers and their paralegals and legal assistants; lower-ranking market-research analysts; clerks and administrators; cashiers, sales representatives, product demonstrators, and promoters; warehouse and factory workers; fast-food and restaurant workers, even non-specialized physicians, researchers, and computer scientists; drivers who lose work to autonomous vehicles, public relations specialists – even actors and actresses whose jobs could become unnecessary due to virtual characters in movies and commercials.

Weiss, who is president of the Taub Center – an independent and non-partisan research institution that deals with economic and social issues – added: “We see here a process in which technology is not only replacing working hands but is completely changing the rules of the game. The meaning for the unemployed is that competition for existing jobs is becoming much tougher, and those who don’t adapt their skills to the AI era may find themselves pushed out. At the policy level, the state must already activate assistance systems for the newly unemployed and design programs for them to provide them with skills complementary to artificial intelligence to enable them to reintegrate into the changing labor market.”

The findings indicate a significant rise in the share of unemployed coming from occupations at high risk of displacement by AI. While between 2019 and 2022, these workers accounted for 14% to 16% of all Israeli unemployed, by 2025, their share had risen to 20% to 25%. The vacancy rate in these occupations has also declined accordingly.

The share of unemployed in occupations at high risk of displacement out of the total unemployed and of job vacancies in occupations at high risk of displacement includes software developers and telephone sales representatives. Among software developers, AI accounts for between 12% and 20% of the increase in unemployment recorded between 2022 and 2024 and 2025; among sales representatives, it explains between 10% and 26% of the increase. 

In both cases, the team explained, the effect reflects not only a decline in the number of vacancies but also a shift in skill requirements, which has made it harder to match unemployed workers to available jobs.

The researchers stated that rising unemployment in AI-exposed occupations is driven not only by disappearing jobs but also by a growing mismatch between workers and available positions. In occupations where vacancies have not dropped at the same pace as unemployment has risen, workers who lost their jobs appear to face increasing difficulty in integrating into existing jobs due to changing requirements demanded by employers.

The team noted that the trend is not driven by AI alone. “It also reflects structural factors such as the slowdown in the hi-tech sector, the growing share of digital-age occupations at risk of automation among both the employed and the unemployed, and the partial regression from structural changes brought about by the COVID-19 crisis. The study suggests that, relative to these other factors, AI still accounts for a modest share of the overall change,” they wrote.

Debowy told The Jerusalem Post that the process of robots pushing people into unemployment is slower than generative AI because of the high cost of implementing their use, but in the end, this does have an impact. In Israel, traditional local manufacturing has needed fewer hands because of robots – a third of such workers have been replaced in recent years.”

Asked about public service jobs, Debowy said that this sector “reacts slower because it doesn’t depend on market forces but rather the decisions of political leaders. We don’t know where public service will go.”

A Taub Center researcher who graduated from Columbia University with a bachelor’s degree in economics, Debowy is pursuing his doctorate at Ben-Gurion University of the Negev (BGU) in Beersheba.

There is a growing preference for more experienced workers. In practice, AI enables experienced and highly skilled workers to become significantly more productive, potentially shifting demand away from those at the beginning of their careers. This finding aligns with evidence from the US, which documented a 13% decline in employment among young workers (aged 22 to 25) in occupations at risk of automation, while more experienced workers were largely unaffected, the team wrote.

The data show that even in occupations where the number of vacancies has remained relatively stable, competition for each position has intensified, as the number of skilled unemployed workers competing for them has increased. This puts growing pressure on job seekers, who now have to present higher levels of experience and skill than in the past to secure a position.

One piece of good news is that overall, unemployment remains stable –but the nature of the labor market is changing. The researchers emphasize that “although the impact of AI on Israel’s overall unemployment rate remains insubstantial, the changes it is driving cannot be ignored. Unemployment has not risen in the AI era, but the composition of the unemployed has shifted. AI already explains between two percent and six percent of the change in the occupational distribution of the unemployed.

People who are replaced by AI can, in many cases, upgrade their skills or even find a new occupation if necessary, he added. “Some people will be unemployed, but others will be hired for new professions. Some will benefit, and some will lose. The situation is in flux. There will be a new balance,” Debowy suggested.

As for affecting teachers, “we investigated but didn’t notice that AI caused employment among educators because children will be taught by virtual teachers on screens. There is currently a severe shortage of teachers in Israel,” he said.