Israel tops OECD in growth, dips in quality of life

Israel's economic prospects surpass average OECD country, though ranked 24th out of 36 countries on Better Life Index.

May 29, 2013 13:49
1 minute read.
Office (illustrative)

Office 311. (photo credit: Courtesy)

Israel’s economic outlook significantly bested the average OECD country according to standard economic indicators, but fell behind in quality of life measures, according to data released on Tuesday and Wednesday.

The OECD projects Israeli real GDP growth at 3.9 percent for 2013 and 3.4% for 2014, as compared to average OECD projections of 1.2% and 2.3%, respectively. Unemployment was also projected at nearly a percentage point lower than the average among developed countries.

The report noted that budget tightening would have a “substantial” effect on the economy, but that loose monetary policy could keep the economy stimulated. On Monday, the Bank of Israel lowered the interest rate for the second time in a month, setting it at 1.25%. While low inflation figures make the low rate possible, the OECD cited concern that an increase in price pressures may limit future monetary stimulation.

In the OECD Better Life Index, however, which presents a more holistic view on quality of life, Israel ranked 24th out of 36 countries. The Better Life Index incorporates criteria such as life satisfaction, housing, work-life balance, environment, civic engagement and community in order to assess how good life is in different places.

According to the latest data, Israelis had less disposable income and worked significantly more hours than the average OECD citizen, while the country had a lower overall employment rate.

“People in Israel work 1,890 hours a year, more than the OECD average of 1,776 hours.

Almost 18% of employees work very long hours, much higher than the OECD average of 9%, with 27% of men working very long hours compared with 8% for women,” the report said.

While Israel’s population was significantly more educated than the average country, with an 8 percentage-point lead in high school education, students performed lower in standardized tests, and the gender gap between girls and boys was higher. Girls outperform boys by 13 points in Israel, as compared to 8 in the rest of the OECD.

Israelis live two years longer on average, despite worse air quality.

“In general, Israelis are less satisfied with their lives than the OECD average,” the report said. While 80% of average OECD citizens report more positive than negative experiences in a typical day, in Israel only 70% do.

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