Market, Government, and Israel's Muted Baby Boom

Cohorts born in Israel since the late 1910s were approximately 70 percent larger than earlier cohorts. This brought about changes in the age structure that are even more dramatic than the American baby boom.This paper follows the impact of the large cohorts on the school system and on the labor market, emphasizing the role played by the public sector. In terms of the number of teaching posts the school system demonstrated on the whole a very prompt ability to adjust to the pressure of high number of pupils. However,as rates of growth of pupils decelerated, inputs in the school system failed to adujst down. As a result, when the larger cohorts moved up the educational scale,the combination of rapid adjustment where they arrived and sluggish adjustment imparted an upward pressure to the aggregate expenditure on education. When the large cohorts arrived at the age of entry into the labor force the impact was delayed and muted by a rapid expansion of the army and of the universities. Relative earnings cfthe young men 18-24 declined sharply during the decade. The earnings of the very young seem to be responsive to the relative size of a broader age group(18-34), as well as to the size elderly (65 plus).