BACKGROUND: How child allowances impact on fertility, haredi employment

Women's pursuit of a job to help make up for the lost child benefits has resulted in postponement of pregnancies.

By MATTHEW WAGNER
haredi kids 88 (photo credit: )
haredi kids 88
(photo credit: )
Child allowances have been a part of Israeli policy for encouraging child-bearing since the mid-1950s. However, at the end of 2000, under haredi political pressure, the allowances underwent a major upgrade, when the "Halpert Law," after MK Shmuel Halpert (United Torah Judaism), granted families with five or more children proportionately higher payments. The added allotment for the fifth child was significantly higher than for the each of the first four children. As a result, very large families (mostly haredi or Arab) were getting significantly more per child than small (mostly secular) families. For instance, a family with eight children under the age of 18 received NIS 3,799 a month before the Halpert Law and NIS 4,827 a month after the law was passed. But the tremendous success of the Halpert Law for the haredi sector brought about its own undoing. The legislation engendered bitterness among secular Israelis who watched as haredim who did not risk their lives serving in the army and often did not work or train their children for gainful employment enjoyed generous welfare benefits. The backlash from the Halpert Law helped propel the virulently anti-haredi Shinui Party into government. As a result of a series of cuts in child benefits, the same family of eight now receives about NIS 1,800, assuming six of the children were born before July 2003 and, therefore, receive slightly higher allowances than the NIS 152 a month per child for those born after that date. Most economists argue that child allowances do not have a serious impact on fertility. The benefits are usually so small in comparison to the cost of raising children that they do not present a real incentive to have larger families. Cuts in child benefits usually do not dampen fertility for the same reason. Nevertheless, according to a Bank of Israel report published in April, cuts in allowances have indeed had an impact on fertility rates. The average number of children in a haredi family has fallen from 4.3 in 2001 to 4.1 in 2006. The average number of children under two years old in haredi families has fallen 18 percent, from 0.45 in 2001 to 0.37 in 2006. In Betar Illit and Modi'in Illit a 10% drop in fertility rates has been reported during the same period. Bank of Israel economists said this was in part due to the cut in the allowances, which made couples rethink family planning. But there is another major factor explaining the reduction in birth rates: More haredi women are joining the labor market. Women's pursuit of a job to help make up for the lost child benefits has resulted in postponement of pregnancies. In parallel, there has been a marked rise in employment rates among both haredi men and women. In 2001, 23.2% of haredi men were in the workforce, in 2006, 27.7% were. For women the rise was even more dramatic. In 2001, 42.1% were working, compared to 49.4% in 2006. The rise is even more dramatic considering that the vast majority of the rise in employment is among haredi men and women under age 40. Men and women older than 40 are usually unable to make a career change, economists argue. This is no less true for men who have spent their entire lives in yeshivot and women who have never been anything but housewives.