Almost a third of children among Israel’s population ranging from infancy to age four live below the poverty line, while more than half of ultra-Orthodox (haredi) and Arab children in this range have this status. A new study by Jerusalem’s Taub Center for Social Policy Studies examines these households so as to identify the characteristics that place their children at the highest risk of poverty and the resulting negative effects this has on their children’s development and future achievements.
Dr. Yael Navon and Liora Bowers researched the incidence of poverty (as defined in the National Insurance Institute Poverty Report of 2018) in households with young children. Their study looks at the characteristics and environment of these households, with the sources of household income provided by Central Bureau of Statistics (CBS) data for that same year.
The incidence of poverty in Israel was among the highest in the OECD countries. About one-quarter of households below the poverty line had children under age four, and 30% of all children under that age lived below the poverty line.
In a breakdown by population group, it was found that more than one-half of Arab and haredi households with children up to the age of four live below the poverty line, 58% and 55%, respectively, as opposed to 8% of non-haredi Jewish households with young children.
Moving from the examination of households to children shows that the situation is even worse – 63% of Arab children and 58% of haredi children in this age group live below the poverty line, compared to 9% of non-haredi Jewish children.
Non-haredi Jews account for about 65% of all households with children up to the age of four here and about one-fifth (22%) of the households with young children below the poverty line.
Arab households are about 16% of the households here, but they account for 42% of households with young children below the poverty line, while haredi households (19% of all households), account for 37% of households with young children below the poverty line.
The researchers found that the incidence of poverty is particularly high among households without any wage earners (87%), or with only one wage earner (57%). Although the probability that children of two working parents are living below the poverty line is lower, about one-tenth of them nonetheless live below the poverty line. In a breakdown by sector, among households with children under the age of four that have two wage earners and income levels below the poverty line, the highest proportions were found among haredim (39%) and Arabs (21%).
Leaving the financing to the wives
Many haredi men prefer to study Talmud and other religious subjects and not to go to work, leaving the financing of their families to their wives who are much more educated in secular subjects.
“Our research found that 22% of children below the poverty line live in a household with at least two wage earners,” Navon wrote. “When we investigated the phenomenon, we found that wage earners in these households are most likely to work fewer hours, are more likely to both be self-employed and have relatively lower levels of education. These findings indicate that it is not enough to encourage parents to work and that additional intervention programs should be considered.”
The higher incidence of poverty among haredim is largely explained by the large number of children, the low number of work hours, and the relatively low share of adults with an academic education in their households.
Among the Arab population, the sector is an important predictor of living below the poverty line, even after controlling for household characteristics, including the number of household members, the work hours of the wage earners, and their level of education. Fewer Arab women work, and if they do, they and their husbands are likely to earn less. Thus, the likelihood that a young child in an Arab household will live below the poverty line is almost six times that of a child from a Jewish household.
GOVERNMENT TRANSFER payments reduce the incidence of poverty by about 11% among young children, but the effectiveness of government benefits varies across population groups. Transfers raise 27% of non-haredi Jewish children over the poverty line compared to only 12% of haredi children, apparently because there are more children in these families.
However, it is more worrisome that among Arab-Israeli children, transfer payments actually served to raise the incidence of poverty by 2%, due to the fact that for a relatively large share of low-income Arab households, mandatory payments (income tax, National Insurance payments, and health insurance) are greater than the social benefits they receive.
An examination of the sources of income in households with children up to the age of 4 that are below the poverty line shows that the proportion of income from labor in Arab households is similar to that in non-haredi Jewish households, i.e., about 75%, as opposed to 54% among haredim.
The differences are large concerning government transfers as well. For haredi Jews, 36% of household income is comprised of government transfers, mostly in support of yeshiva students (14%) and child allowance (4%), while among non-haredi Jewish households and Arab ones, the rates are about 20% and 23%, respectively. The share of income from the negative income tax, which is meant to encourage parents to work, is particularly low among all of the groups.
Young children living below the poverty line, particularly in the Arab sector, generally live in more crowded households and in residential areas with a low socioeconomic ranking. As for home ownership, however, it is a surprising fact the haredi and Arab households tend to own their own home (with or without a mortgage): 72% and 82%, respectively, while among non-haredi Jews, the rate is 40%.
Spending per capita is lower in all categories in households below the poverty line, and even though households below the poverty line have more young children on average, they spend less on education and early childhood care.
Among these households, the highest expenditure concerns daycare, family homecare, and infant care – NIS 890 per month on average (compared to NIS 1,928 per month in households above the poverty line). The average expenditure on private preschool in these households is NIS 581, as opposed to NIS 2,233 in households above the poverty line.
The differences in these types of expenditures are probably the result of the fact that in some of these households, there is a single wage earner or the second wage earner works only part-time and, therefore, the children need fewer hours in educational and care frameworks; in supervised care frameworks, there are higher subsidies for low-income families.
The Taub Center is an independent, non-partisan socioeconomic research institute that provides decision-makers and the public with research and findings on some of the most critical issues in the areas of education, health, welfare, labor markets, and economic policy – to impact the decision-making process.