Artificial intelligence is displacing workers over 50 from the job market. As the government avoids funding retraining programs, it faces steep expenses in benefits and reduced tax income.

Illustration: Using AI at work

(photo credit: SHUTTERSTOCK)

ByDANIEL COHEN

JULY 28, 2026 13:00

Dori Cohen, age 25, recently lost his position as a software tester at a technology firm. Three months prior, his father Avraham, who worked as an administrative operations manager at a separate high-tech company, was also let go. Their daily routines now mirror each other in sending out applications. Yet the parallels stop there. Dori has joined multiple programs to stay current and remains hopeful. Avraham, nearing 60, shares a contrasting account: "They compensated me with NIS 30,000 monthly for my strong operational skills and background. They substituted me with an entry-level employee earning one-third as much, who uses artificial intelligence and delivers strong results. I grasp the reason for my dismissal, and I grasp one more fact: My abilities are not in demand."

Avraham's situation is not unique. The rise of artificial intelligence tests younger employees too, yet for experienced staff adaptation proves more difficult: They must master new tools while shifting to updated methods, abilities, and routines that evolve swiftly. For those in Generation Y and Generation Z, who matured alongside smartphones and online platforms, these innovations extend naturally from daily life and integrate seamlessly into work.

The 2025 labor market report, released weeks ago, paints a troubling outlook on older adults entering the Israeli workforce. Projections for 2030 point to roughly 12 percent unemployment among those aged 50 and above.

Artificial intelligence not only eliminates roles but swiftly alters required abilities across fields. Employees between 40 and 60 who skip refresher training end up with outdated competencies that fail to meet market needs. Research from Israel and globally indicates that a worker dismissed after age 50 risks extended joblessness and permanent workforce exit. As time without employment grows, hiring prospects drop sharply, with employers favoring younger and lower-cost candidates, turning short-term unemployment into permanent retirement.

Deceptive economies: Shortcomings in the government framework

Review shows the state provides several training options, mostly at basic levels. On Campus IL, run by the National Digital Directorate, offers free introductory artificial intelligence courses in Hebrew via online self-paced learning. The Labor Ministry runs targeted programs, such as an "AI Systems Integrator" course for technology integration in organizations, while the Employment Service sometimes provides varying sessions with high-tech partners.

"On the surface it appears like a solid effort, yet the figures tell another story," notes economist Ram Ben Avi, who specializes in senior citizen policy. "Israel allocates just 0.07 percent of GDP to vocational training, versus an OECD average of 0.11 percent."

Still, this restraint proves misleading: Funds not spent on training get directed elsewhere at higher cost. Per his analysis, "An older jobless worker expenses the state NIS 80,000 to NIS 100,000 yearly in unemployment payments alone, prior to income aid, support allowances, and foregone tax receipts. Thousands of older adults outside employment build up over ten years to tens of billions of shekels. Against that, one substantial training program for an older worker runs NIS 15,000 to NIS 20,000. Preparing 50,000 older adults would total around NIS 1 billion, one time. Official reviews of Labor Ministry efforts showed most tracks yield at least a 6 percent income rise over time. Put simply, the state recognizes the return on investment yet opts against it."

Why do older workers struggle to access state-backed training? Primarily because the structure overlooks them: Voucher eligibility centers on job-seeker status rather than age, so a 58-year-old facing declining prospects enters a program only post-layoff. Even then, training periods count against unemployment benefits, potentially exceeding coverage. The core shortfall lies in program design. State training targets career shifts, converting someone into a practitioner of an entirely new field such as welding, electrical work, or accounting.

"A worker like Avraham requires no career shift but an update to his current role: Continuing operations management via fresh tools. Yet most options fail to match this. Most AI programs teach technical abilities without clear job paths, while vocational tracks lead to employment but typically in unrelated fields. Options bridging the two, refreshing skills in the same occupation, remain limited compared to demand, and older workers fall first into this void," Ben Avi notes.

Costly options in the private sector

Beside these runs a full private sector: Colleges, digital academies, and solo instructors. An AI course serves as a standard offering for all workforce segments, from students to executives, with private pricing in two levels. The lower tier covers basic beginner sessions, often recorded self-study or single online meetings, priced from several hundred shekels to NIS 1,500. The upper tier includes advanced programs with mentoring, hands-on projects, and focus on sought-after areas, ranging from NIS 2,500 for online formats to NIS 15,000 to NIS 20,000 for full tracks.

Global lessons Israel overlooks

How do other nations address this? In Singapore, every citizen over 40 gets a non-expiring training credit of 4,000 Singapore dollars, with the state covering up to 90 percent of fees, and participants on mid-career study leave receive half-salary support for as long as two years. This year added six months of free access to paid AI tools for those joining relevant courses. Britain provides 16-week data and artificial intelligence training at no cost, including a job interview guarantee. The European Union has codified this since 2025: Any organization using AI systems must train staff on them.

The state comptroller, Bank of Israel, and Israel Democracy Institute have flagged older adult training as essential for boosting employment and output. "Many see core studies as the chief risk to Israeli education and economy ahead, one that will erode productivity and unity. Yet this issue is also set to erupt with equal intensity," Ben Avi concludes.