The Economy of Resilience

It’s day one million of the war, or at least that is how many Israelis feel.

For many of us, simply getting through the day has become exhausting. Some mornings, it feels hard to breathe. Getting out of bed can feel like preparing for a marathon: long, relentless, and draining.

This is our second Aliyah. My husband and I first moved to Israel from Australia in 2007 as a young married couple. After several years in Australia, we returned to Israel in 2022 with our two children.

We knew Israel had never been free of tension, conflict, or security threats. Since independence in 1948, the country has rarely seen a genuine pause in regional conflict. Yet this period feels different. The war feels heavier, longer, and more emotionally draining than anything many of us have experienced.

And yet, despite all of it, I would not want to live anywhere else.

From the outside, Israel’s reality should not make economic sense. A country facing prolonged war, political polarization, reserve-duty mobilization, and constant security threats should, in theory, struggle. Yet Israel remains remarkably resilient.

Even during wartime, the shekel has remained relatively strong, and the high-tech sector continues to attract investment. In 2025, Google announced its $32 billion acquisition of Wiz, an Israeli-founded cybersecurity company — the largest in Google’s history. Global markets continue to value Israeli innovation.

Part of the answer lies in the structure of Israeli society.

Israel’s economy has long relied less on natural resources and more on human capital, though future gas reserves may change that equation. Innovation here is not merely an economic advantage; it is a survival mechanism. Military service, though difficult and costly, fosters networks, adaptability, leadership, and technological expertise. Israeli society rewards improvisation and resilience because uncertainty is not theoretical here — it is lived daily.

At the same time, the ongoing crisis has fostered social cohesion that many Western societies increasingly lack. In countries where individualism dominates public life, people often struggle with loneliness, fragmentation, and a loss of meaning. Despite its divisions, Israel still maintains a strong collective identity.

This may help explain another contradiction: Israel consistently ranks among the world’s happiest countries despite ongoing conflict and insecurity.

How can people living amid sirens, terrorism, and uncertainty report higher life satisfaction than citizens of peaceful Western democracies?

Perhaps happiness is not simply the absence of hardship.

Positive psychology offers one explanation. Martin Seligman, a psychologist and former president of the American Psychological Association, argues that flourishing depends not only on comfort but also on meaning, relationships, and belonging. Roy Baumeister, a social psychologist known for his work on meaning and well-being, found that happiness and meaning are distinct: happiness is associated with comfort, whereas meaning is linked to identity, responsibility, and connection to something larger.

Israelis live with stress and extraordinary communal responsibility. During wartime, strangers cook for reserve soldiers, help displaced families, donate supplies, and open their homes and bomb shelters.

Perhaps difficult lives become easier to bear when people feel connected to a purpose.

Whether religious or secular, many Israelis feel connected to a broader historical narrative and a collective mission. That sense of purpose has economic significance. Countries with stronger social trust are often more resilient because people continue to invest in the future.

Aliyah reflects this paradox. Despite the war and rising living costs, many Jews from Western countries continue to move to Israel. Ironically, the shekel’s strength has made Aliyah financially more difficult than it was a decade ago.

And yet, people still come.

Of course, arriving in Israel does not guarantee that expectations will align with reality, and not everyone who makes Aliyah stays. But the decision to come despite uncertainty is revealing in itself.

At the same time, many Israelis have left since October 7 because of security concerns, economic pressure, and uncertainty.

People leave their countries during war.

The Israeli government appears aware of this tension and continues to offer incentives and absorption benefits to encourage Aliyah. However, incentives alone do not explain the pattern.

What makes Israel unusual is not that nobody leaves. It is that immigration continues.

That does not prove life in Israel is easy. Rather, it suggests that despite war and uncertainty, Israel remains a place people still choose to live.

Perhaps that reflects something deeper than economics. Meaning, belonging, and connection may help explain why people continue to invest in life here.

I understand why.

As I entered my forties in Australia, I increasingly felt something was missing. Life was comfortable, stable, and predictable, yet emotionally flat. I wanted my children to grow up with a sense of responsibility, resilience, and community. Living in Israel has exposed us to painful realities, but it has also given us a deeper sense of belonging than we had anywhere else.

Life in Israel is not easy. It is exhausting, politically divided, emotionally draining, and often frightening. Yet perhaps that is precisely why life here feels meaningful.

There is no perfect country. Every society lives with uncertainty, but Israel experiences it more visibly and more intensely than others.

Yet despite fear, exhaustion, and uncertainty, Israelis continue to put one foot in front of the other.

Perhaps that resilience — social, emotional, and economic — is Israel’s greatest national asset.