Study finds major gap between upper and lower middle class in Israel

The biggest factor explaining the difference in the groups was the number of wage earners in the household.

May 20, 2014 12:32
1 minute read.
Ultra-Orthodox men at question and answer session with Economy and Trade Minister Naftali Bennett.

haredi men sitting 370. (photo credit: Marc Israel Sellem/The Jerusalem Post)

The wealth disparities between Israel’s upper and lower middle class are significant and growing, according to a Taub Center study released Tuesday.

The lower middle class, which accounted for 40 percent of the population, had a monthly per capita wage range of NIS 1,950 to NIS 5,000, while the upper middle class, which accounted for 29% of the population, had a range of NIS 5,100 to NIS 12,540.

“The long-term goal should be a unification of these two groups into a single large and strong middle class,” said Bar-Ilan University’s Zoya Nisanov, who authored the study. “To achieve this, the gaps between the lower middle and upper middle class must be narrowed.”

The biggest factor explaining the difference in the groups was the number of wage earners in the household: Smaller percentages of families in the upper middle and upper classes had just one income.

“These findings can explain, at least in part, the lower likelihood that haredim, Israeli Arabs and immigrants will belong to the middle class, since in these households the number of wage earners is particularly low,” the study said.

Another factor affecting haredim and Israeli Arabs, in particular, was the number of children: Every additional child under 18 increased the likelihood of the household belonging to a lower class, the study said.

Overall, haredim had a 42% higher chance of being in one of the lower classes, while Israeli Arabs had an 18% higher chance.

The study also found that age played an important role. Up until a certain age, getting older increased the chance of belonging to a higher economic class; after that age, it reduced the chances. The lowest class was the oldest, while the upper middle class was the youngest.

Gender also played an important role. Nearly 60% of poor households were headed by women, while only 24.3% of upper-class households were.

When it looked at which policy tools were best at narrowing the wealth gaps, the study questioned the usefulness of child allotments.

“There is no proof for the conjecture that child allowances contribute to a lessening of the polarization between rich and poor,” the study said.

Old-age allowances were shown to be more effective in narrowing income disparities, it said.

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