Summary:

  • The economic crisis and its effects on the labor market can be seen in the widening of poverty: the incidence of poverty, according to the accepted relative definition, rose to 24.3 percent of the population, about 1.7 million poor people. At the same time the incidence of poverty in families, the incidence of poverty according to the absolute approach and the SEN poverty index also grew. As opposed to these, the income gap (which measures the average distance of poor people's incomes from the poverty line) and the Gini index (which measures income inequality) remained almost unchanged.  
  • The rate of poor people by income who consume below the relative poverty line, an index that usually indicates continuing poverty, had already grown significantly in 2008, and stood at 62.4 percent.  
  • The scale of poverty in Israel is high, both in comparison with OECD countries and compared with the past. The trickling down of growth to the weaker segments was slow and relatively late, so that when the crisis broke out Israel did not have "social reserves" to lean on.  
  • The incidence of poverty rose in 2008/9, despite the real decrease of 1.6 percent in equivalised median per capita income, which led to a similar rate of decrease of the relative poverty line.  
  • The direct contribution of policy for reducing poverty by means of transfer payments and taxes grew slightly, but is very low in relation to the past and in relation to OECD countries.  
  • The incidence of poverty is particularly high among the Arabs and the ultra-Orthodox-two population groups characterized by a high birth rate and a low rate of employment (the latter particularly among Arab women and ultra-Orthodox men). In 2008/9 the Arab poor were 44 percent of the poor in Israel and the ultra-Orthodox poor-18 percent.  
  • Over the past decade the extent of poverty has grown among households with at least one earner. This development points, on the one hand, to the entry of weaker populations into the circle of employment, and on the other hand, to the absence of satisfactory policy to improve the level of earned income of populations whose earning power is low.  
  • In October 2008 the implementation of Earned Income Tax Credits (EITC) commenced in several regions in Israel. EITC acts to improve the welfare of workers earning low salaries, and in this respect is consistent with the overall policy of reducing poverty by increasing employment. However, because of the limited extent of the implementation, and the relatively low level of the grant, the impact on employment and on welfare is, at the present time, small.  
  • In 2008 there were in Israel about 195 thousands recipients of a general disability allowance, constituting about 4.6 percent of the population in the entitlement age for this allowance. Following the recommendations of the Laron Committee, far-reaching policy changes have been instituted in recent years with regard to disability allowance recipients and the disabled in general, with the aim of promoting their integration into the community and the labor market.  
  • In Israel, unlike the developed countries, dental health services are provided largely by the business sector. The benefits of basic dental treatments for children are great, and their cost is low. For this reason it is important to introduce these treatments into the health basket.  

Welfare Policy Issues - Full File