How Much Does It Cost Us? The Invisible Price Tag of the Israeli-Palestinian Conflict

>> Click here for the full policy paper HOW MUCH DOES THE CONFLICT COST US? 

At an average 6% of GDP, Israel’s defense spending is relatively high compared with that of other countries where such outlay is much lower, but it is relatively low at present compared with its level in the past.

The Arab-Israeli conflict, however, which has primarily become an Israeli-Palestinian conflict, entails additional costs that raise defense spending from 6% to 40% of GDP. One of these costs is compulsory military service, which forces most Israelis to start their work careers and academic studies with a delay of at least 4 years for men and 3 years for women. As a result, they suffer a significant loss of income throughout their lives, which translates into a loss of 5.7% of GDP for the entire economy. In other words, GDP and income could be 5.7% higher.

An even larger loss is caused by lower investment in the Israeli economy because investors anticipate risks. Consequently, the ratio of capital to GDP in Israel is relatively low and results in a loss of 26% of GDP. In other words, were it not for the conflict, GDP and income could be 26% higher.

If we add up all these costs, we arrive at an overall loss of approximately 40% of GDP. Obviously, a peace agreement would not completely eliminate all these costs, as military service of at least one year would still be compulsory, safe rooms would still need to be built, and Israel would still have to maintain a big and costly army. Having said that, a rough calculation shows that a political agreement would increase output by approximately 30% within a few years, which would hugely improve the standard of living of Israel’s residents.


Dr. Maha Sabbah Karkabi


Senior Lecturer in the Department of Sociology and Anthropology, Ben-Gurion University of the Negev. She holds a Ph.D. in Sociology from Tel Aviv University (2015), a postdoctoral fellowship at the Center for Gender Studies, SOAS, University of London (2015-2016), a postdoctoral fellowship in the Department of Sociology at Tel Aviv University (2016-2017), and a postdoctoral fellowship Ph.D. at the Humphrey Institute for Social Research, Ben-Gurion University of the Negev (2018-2020).
Dr. Maha Karbahi’s areas of interest focus on the connection between social change, family behavior, and gender inequality in societies in the process of change and specifically in Palestinian Arab society in Israel. Her research draws attention to the study of family life and employment, using a combined “ethnic lens” and “gender lens” and paying attention to the perspective of Palestinian Arab women, a group characterized by intersections between multiple marginal locations, which over the years has remained hidden from the research eye. Dr. Karkabi-Sabah’s research is published in professional journals and chapters in scientific books that are considered pioneers in family research, work, and gender equality.


Prof. Frances Raday

Professor Emeritus in the Lieberman Chair in Labor Law, in the Faculty of Law at the Hebrew University and serves as a full professor in the College of Management’s academic track, where she also serves as chair of the graduate program and as honorary president of the Concord Center for International Law Absorption. Radai was a member of a working group of the UN Human Rights Council on discrimination against women. In addition, she is a prominent and feminist human rights activist.


Dr. Rawia Aburabia 

Faculty member of Sapir Academic College’s School of Law, received her PhD from the Hebrew University of Jerusalem. Her research deals with the interface between law, gender, minorities, and human rights. Has published in leading journals on the subject of the matrimonial laws pertaining to Muslim women in Israel. Her book Under the Law, Outside Justice: Polygamy, Gendered Citizenship, and Colonialism in Israeli Law is expected to be published as part of the Gender Series of Kibbutz Meuhad Publishing House.

Dr. Aburabia has extensive experience in international human rights and public law. She has worked as a jurist for the Association for Civil Right and has been invited as a specialist to address such international forums as the United Nations and the European Parliament on the subject of indigenous communities and minority rights. She has interned with Human Rights Watch in Washington DC, and has been a member of the executive board of Amnesty International. In 2018, she was selected by the magazine Globes as one of the 40 most promising young persons in Israel under the age of 40.



Ron Kessler

With over two decades of experience in the field of digital content, Ron has participated in numerous political and social campaigns. He helped run the digital activity of senior public officials, and worked in various NGOs. Ron is a fundamentally optimistic man, who believes that Israel can be changed and so can people. Lives in Tel Aviv.