Report: Israeli welfare transfers unsustainable

Report Israeli welfare

Israel is on an unsustainable long-term social and economic trajectory with very little change in the country's poverty rates over the past three decades, according to research published Sunday by the Taub Center for Social Policy Studies in Israel. Ahead of the publication of its annual State of Society and the Economy Report, which will be released next month, the center's data notes that current poverty rates differ very little from levels in the 1970s, with roughly one-fifth of families living below the poverty line, like in 1979. "Instead of dealing with the root causes of poverty, Israeli governments have preferred to apply only symptomatic treatment, with an emphasis on welfare payments," commented Dr. Dan Ben-David, Taub's executive director and an economics professor for the Department of Public Policy at Tel Aviv University. "The problem is that simply increasing welfare assistance - even though it is an important social safety net - is not sustainable in the long term," said Ben-David. "Instead of tackling the root causes of these problems, successive Israeli governments preferred to simply increase welfare payments," he said. "On one hand, we are lucky that Israel has been able to provide such a safety net," continued Ben-David. "On the other hand, however, welfare assistance per capita in Israel has risen five fold in the past four decades, while the average income has only doubled." Ben-David said that while he expected welfare budgets for 2009 and 2010 to increase again, which will in turn appear to reduce poverty rates in net incomes, not enough has been done to deal with the underlying reasons why poverty and inequality are so high to begin with. "If far-reaching comprehensive policies are not implemented soon to deal with these fundamental problems, Israel will face social and economic dilemmas in the future that can't be solved," he said, adding "it will be impossible to continue increasing welfare assistance at the same rate, and with poverty and inequality already among the highest in the Western world, not treating the underlying causes will mean these problems cannot remain hidden any longer." The Taub Center for Social Policy Studies in Israel is an independent, non-partisan socioeconomic research institute based in Jerusalem and funded by the American Jewish Joint Distribution Committee and private donations.