Decision makers are concerned over "Labor Activation" programs such as "Welfare to Work", i.e., encouraging income-support unemployed claimants to enter the labor market. This issue has socio-political ramifications because it is linked to sensitive issues such as unemployment, the low employment rates of Arab women or Ultra-Orthodox men and hence to important macro-economic issues. The "Circles of Employment" program is another "welfare to work" governmental program which aims to return income-support claimants to the work force through job placement. This program is supplied by the governmental Employment Service in conjunction with workshops and individual coaching sessions provided by an outside supplier. The program is designed as a compulsory program for any income support unemployed claimant. The program has been in operation since 2014 on a limited and experimental basis, but a large funding increase for the program through the Arrangements Law 2017–2018 demonstrates the intention to expand it considerably. In the coming years the program may operate throughout the country and all income-support claimants who meet certain criteria in all the employment bureaus in Israel may be obligated to join it.

"Circles of Employment" is the most recent in the chain of government programs aimed at returning income-support claimants to the labor market and which include elements of outsourcing or privatization to varying degrees.

The paper asserts that "Circles of Employment" contains a moderate degree of outsourcing, as a result of lessons taken after the collapse of the former program which was a radically privatized one, infamously known in Israel under the name of the "Wisconsin Program".

The paper analyzes the privatized (outsourced) elements of the program. The conclusions are mixed: on the one hand, some elements show high level of government control and lessons embodied from the Wisconsin fiasco. On the other hand, other elements raise several concerns regarding the interface between the public and the private. These concerns are presented in this paper, at the end of which appear recommendations meant to deal with them.

The paper focuses on an analysis of the relations between the public and the private—between the government service and the outside supplier—in relation to the "Circles of Employment" program.