‘Poverty rate in Israel high relative to developed countries’

Israeli households have trouble covering expenditures, Taub Center study reveals.

June 18, 2015 07:28
2 minute read.
Homeless Israel

Homeless person on Jaffa Street in Jerusalem.. (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)


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The “depth of poverty” in Israel has worsened, with the average income of poor families in 2010 at 31 percent below the poverty line.

This was one of the findings of a study from the Jerusalem-based Taub Center for Social Policy Studies in Israel to be released on Thursday.

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The study, “A Picture of the Nation 2015,” presents a picture of Israel’s society and economy in a number of key areas: the cost of living, housing, inequality, the labor market, the shadow economy, the elderly population, education and health.

The poverty rate has risen over time, although there has been a slight decline in the past few years, and it is high relative to most developed countries, for both individuals and families, according to the study.

Many households, across sectors and income levels, have difficulty covering their monthly expenditures, particularly in the haredi sector.

The study shows a significant dwindling of resources among the ultra-Orthodox, evidenced by the larger mortgages being taken out than in the past to buy apartments in that sector. The average monthly mortgage payment has risen in the past decade by 72% in the ultra-Orthodox sector, while the prices of the apartments that they purchase have risen by only 6%, the Taub Center found.

A key finding relates to food import barriers, which lead to high prices because the local market is left with virtually no competition. Food groups in the highest demand – meat, breads and grains, fresh fruits and vegetables, dairy products and beverages – have the lowest proportion of imports, which means that people pay high prices for the products they consume most, according to the study.

The healthcare system is experiencing a serious crisis, with public expenditure low relative to other countries with nationalized, universal healthcare services, the researchers wrote.

Unlike other countries, where private expenditure on health comes mainly from private insurance, in Israel it is mostly out-of-pocket payments by patients.

On international achievement tests, the share of Israeli students who excel has risen slightly, in comparison to a slight drop for the OECD average between 2006 and 2012.

On the other hand, the share of weak students in Israel is still far worse than the OECD average, with Israel at about 29% versus the OECD’s 18%. Israel did see an improvement between 2006 and 2012, with the proportion of weak students declining by 7 percentage points in contrast to the OECD decline of only 2 percentage points.

In the past few years, there was a substantial rise in the share of the education budget within the total state budget, jumping from just over 9% in 2006 up to nearly 11% in 2014.

Despite this rise, it was not enough to keep Israel’s per-student expenditure on par with the OECD average.

While the number of students in Israel rose in 2010 relative to 1995, it decreased in the OECD.

Most of the budget increase in Israel began in the 2013-14 school year, and as that data is not yet available, it may paint a brighter picture once it is released.

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