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Israel: A Social Report 2015.

ALL QUIET ON THE SOCIO-ECONOMIC FRONT

The median wage has not changed for over a decade. The proportion of Israeli workers earning low wages - 22.1% (2013)--is among the highest among OECD countries (low wages = 2/3 of the median wage). One-third of Israeli workers earn no more than the minimum wage. At the same time, the average monthly salary bill of the directors-general of Israel's largest corporations was in 2014 more than NIS 400,000.

The above figures are a good reflection of the way the national income divides up: between 2004 and 2014, the share of employers grew from 14% to 17%, while the share of workers declined from 61% to 57%.

Wealth is on the rise: in 2014, the financial assets 'held by the public" amounted to NIS 3,259 billion--2.2 times more than in 2000. There are no figures on how this amount is distributed among different income brackets, but there is no doubt that the expression held by the "public" is inaccurate: from what we know from other countries, it is reasonable to assume that the lion's share of those assets is to be found in the hands of individuals in the top income decile and especially in the hands of persons in the top one percent.

While wealth keeps growing, the poverty rate--18.8% of Israeli families--remains high and is among the highest among OECD countries.

Very few economic sectors pay good salaries: hi tech, financial services, self-employed persons who provide corporate services. Employment in these sectors of the economy requires college degrees, but only half of young people in Israel pass the high school matriculation exams that are a prerequisite for college admission and only about 30% of youngsters who were 17 years old in 2006 enrolled in academic institutions by 2014.

These figures call out to the government to become active and involved. The government itself is a major employer and it is responsible for the school and higher education systems. However, the opposite is what is happening: the state has been restraining its own economic activity in order to make space for the business sector. While in the decades immediately following establishment of the state of Israel the state was the primary social and economic actor, leading economic development, employment, immigrant absorption, housing and education, in recent decades it has endeavored to reduce its actions and cut its budgets. The result is the shrinking of the social services that it provides. State expenditure in 2014 amounted to 41.2% of GDP, lower than that of most western European countries and below the OECD average.

Not only that: the agenda of successive Israeli governments has been set first and foremost by the Palestinian conflict, and no political solution appears to be on the horizon. Israeli governments are not disposed to develop long-range programs for improving educational achievements, increasing the student population or broadening the limits of Israel's "start-up nation" beyond the borders of "the state of Tel Aviv."

ECONOMIC GROWTH IS NOT THE PANACEA

The common response of state leaders to the figures presented here is that what is needed is more and more economic growth.

Firstly, economic growth has not been stable, due not only to global economic crises like that of 2008, but also to frequent violent confrontations with the Palestinians. The graph on the next page shows that while other countries were adversely affected by the worldwide financial crisis, Israel's economy was adversely affected in addition by the second intifadah. Not only that: since the second intifadah, there have been 8 violent confrontations in the Gaza Strip. The direct economic loss due to each confrontation was limited, but their accumulated effect on certain population groups and in particular geographic areas has been debilitating and has contributed to a general atmosphere of instability.

Secondly, of and by itself, economic growth is no assurance that the fruits of growth will be divided equitably.

Since the end of the second intifadah, the Israeli economy has demonstrated higher economic growth than European countries: between 2000 and 2014, Israel's GDP grew by an average of 3.3% annually, compared with 1.6% for OECD countries on average. (1) It might have been expected that this phenomenon would improve the economic situation of the majority of Israelis.

However as we mentioned above, the median wage--defined as the wage in the middle--with half of Israelis earning more and half earning less, has not changed.

To assure an equitable division of the fruits of economic growth, one needs appropriate social policies.
Economic Growth in Israel and in OECD Countries, 2000-2014 and
Forecast for 2015 and 2016

         2000   2001   2002   2003   2004   2005   2006   2007   2008

Israel   8.9    0.2    -0.1   1.2    5.1    4.4    5.8    6.1    3.1
OECD     4.0    1.4    1.6    2.1    3.2    2.6    3.0    2.6    0.2

                                                   Forecast

         2009   2010   2011   2012   2013   2014   2015   2016

Israel   1.3    5.5    5.0    2.9    3.3    2.6    2.5    3.3
OECD     -3.6   2.9    1.7    1.2    1.4    1.7    --     --

Median Income for a Salaried Employee, 2003-2004

In NIS, current prices for 2014

         2000   2001   2002   2003    2004    2005    2006    2007

Median
Income    --     --     --    6,263   6,385   6,272   6,451   6,809
In NIS

                                              New Series

         2008    2009    2010    2011    2012    2013    2014

Median
Income   6,576   6,486   6,468   6,380   6,398   6,604   6,707
In NIS

         Forecast

         2015   2016

Median
Income    --     --
In NIS

Sources: Adva Center analysis of CBS Income and Expenditures Survey
database, various years; CBS, Statistical Abstract of Israel, various
years; CBS, press release "Early Estimates of the National Accounts
for 2015" (Hebrew), October 18, 2014; Bank of Israel, "Macro-
Economic Forecast of the Research Department" (Hebrew), September 24,
2015; OECD figures based on www.data.worldbank.org


ECONOMIC GROWTH DIVERGED FROM WAGE GROWTH

The gap between economic growth and wage growth has been a feature of the Israeli economic for some thirty years.

According to figures published by the National Insurance Institute, between 1968 and 1988, economic growth was accompanied by growth in real salaries and in the average wage of Israelis. "However, while between the beginning of the 1990s and about the year 2000, salaries rose concurrently with per capita GDP, even if the rise in the former was lower, from 2000 on real salaries did not change. This means that the fruits of growth were not (on average) dispersed among workers but rather were channeled to other places." (2)

Without the intervention of social policy, the fruits of economic growth, which are supposed to trickle down, trickle up instead.

[GRAPHIC OMITTED]

WEALTH IS ON THE RISE

While real salaries in Israel are not growing, wealth is. This is evidenced in the increase in what are termed "financial assets held by the public" (bank deposits, securities, pension savings and life insurance). Between 2000 and 2014, these assets doubled, from NIS 1,452 to NIS 3,259 billion (in current prices for 2014).

In Israel there is no disaggregation of such assets by income bracket. From what is known in other countries, it is reasonable to assume that here, too, the top income decile, and within it the top one percent, enjoys a disproportionate share.
Financial Assets Held by the Public, 2000-2014

In NIS billions, current prices for 2014

2000   1,452
2005   2,249
2010   2,851
2014   3,259

Note: The public: Includes individuals and corporations,
households, firms and national institutions. Does not include
government, the Bank of Israel, commercial banks, mortgage banks
and investments of foreign nationals.

Source: Adva Center analysis of CBS, Statistical Abstract of
Israel, various years.

Note: Table made from bar graph.


SENIOR EXECUTIVES' SALARIES DIVERGED FROM THE SALARIES OF OTHER ISRAELIS

While the median wage hardly changed, the salaries of senior executives in the largest corporations increased tremendously.

We know this thanks to a law requiring corporations traded on the Tel Aviv Stock Exchange to publish the cost of their five highest salaries. The figures below, for 2014, are the most recent ones available.

The salary bill of directors-general of the 100 largest corporations listed on the Tel Aviv Stock Exchange was, on average, NIS 5.01 million per year, or NIS 417 thousand per month. This sum is lower than it was in 2013, but it is still beyond the wildest dreams of most Israelis.

The annual average cost of the salaries of corporate officials with the five highest salaries in the top corporations amounted to NIS 3.64 million, or NIS 303 thousand per month.

The same year, the average cost of the five highest earners in these corporations was 32 times the average salary in Israel (NIS 9,373) and 70 times the minimum wage (NIS 4,300).
Monthly Salary Bill of Directors-General of the 100 Largest
Corporations Traded on the Tel Aviv Stock Exchange

In NIS thousands, current 2014 prices.

                                     Directors-General

                                 2011   2012   2013   2014

Average monthly salary bill      555    384    515    417
Salary and/or management fees    227    219    232    212
Bonuses                          191    124    164    169
Stock options                    253    130    166    119
Other                             28     10     54     9

                                     Senior Officials

                                 2011   2012   2013   2014

Average monthly salary bill      351    293    332    303
Salary and/or management fees    166    171    173    166
Bonuses                          109     90     90     92
Stock options                    128     83     97     90
Other                             38     21     32     35

Source: Adva Center analysis of figures from the website of the
Government Securities and Commodities Authority, 2011-2014.


THE PROPORTION OF WAGE EARNERS MAKING THE MINIMUM WAGE OR LESS REMAINED STABLE; THE PROPORTION OF WAGE EARNERS MAKING MORE THAN THE AVERAGE WAGE ROSE SOMEWHAT

The National Insurance Institute publishes figures on wage earners according to three wage levels: up to the minimum wage, up to the average wage, and above the average wage. Unfortunately, the data are published at a lag of two years.

During the financial crisis that followed the second intifadah, the proportion earning the minimum wage or less grew: in 2002, it was 31.7% and in 2003 it rose to 35.4%. Since 2010 the proportion has remained quite stable: in 2013 it was 31.3%.
Wage Earners in Israel, by Wage Level, 2000-2013

In percentages

Wage earners   2013   2012   2010   2008   2006   2004   2002   2000
making

Up to the      31.3   31.3   31.4   32.8   35.1   34.1   31.7   29.1
minimum wage

From the       4.8    6.8    8.1    6.8    5.0    6.4    7.6    11.7
minimum wage
to half the
average wage

From half      20.2   20.2   20.3   20.8   21.3   20.2   20.3   19.9
the average
wage to 75%
the average
wage

From 75% the   13.0   12.4   12.1   12.3   12.4   12.2   12.3   11.5
average wage
up to the
average wage

Total          69.3   70.7   71.9   72.7   73.8   72.9   71.9   72.2
earning the
average wage
or less

Twice the      20.1   19.3   18.4   17.8   17.7   18.3   18.8   18.1
average wage

Three times    10.5   10.1   9.6    9.6    8.4    8.7    9.3    9.7
the average
wage

Total          30.6   29.4   28.0   27.4   26.1   27.0   28.1   27.8
earning the
average wage
or more

Source: Adva Center analysis of National Insurance Institute, Wages
and Income from Work by Locality and by Various Economic Variables,
2013, Mark Rosenberg, October 2015 (Hebrew).


ISRAEL SCORES HIGH ON LOW WAGES

The OECD gives us an international perspective on low wages in Israel. Each year, it publishes the proportion of employees receiving low wages, defined as less than two-thirds the median wage in the country.

Israel can be said to "excel": in 2013, 22.1% of employees in Israel earned low wages--one of the highest proportions to be found among OECD member countries.
Proportion of Employees Earning Low Wages, 2013

United States    25.0
South Korea      24.7
Estonia          24.0
Ireland          23.3
Poland           22.7
Israel           22.1
Canada           21.0
Great Britain    20.5
Czech Republic   20.1
Slovakia         20.0
Denmark          19.9
Portugal         19.4
Germany          18.8
OECD average     17.1
Iceland          16.9
Hungary          16.8
Austria          15.9
Australia        15.8
Chile            15.3
Holland          14.9
Luxembourg       14.8
Spain            14.6
Japan            14.2
Mexico           14.2
Greece           13.9
New Zealand      13.7
Italy            10.1
Switzerland      9.2
Finland          9.1
Belgium          6.0

Note: Table made from bar graph.


LITTLE PROGRESS MADE IN CLOSING GENDER WAGE GAPS

Women are over-represented in the lower rungs of the wage ladder, according to figures published by the National Insurance Institute: In 2013, 32.5% of female employees earned no more than the minimum wage, compared to 18.1% of male employees. At the same time, 74.2% of female employees earned the average wage or less, compared with 57.7% of male employees.

These figures demonstrate the gender pay gap, which remains more or less stable, despite a slight improvement in recent years. On p. 12 we present monthly and hourly wages, according to the Central Bureau of Statistics. It should be noted that figures from 2012-2014 are from the Household Expenditure Survey in its revised format. We include them here because our main interest is in the gender gap rather than in the amounts themselves.

The gender gap is especially great when it comes to monthly wages, for two main reasons. One is the occupational segregation prevailing in the labor market between "male" occupations and "female" occupations, whose remuneration is lower; (3) Another is that many women are employed in part-time or temporary positions. In 2014, women's average monthly wage was 66.9% of men's.

Israel is not exceptional when it comes to gender pay gaps. In international comparisons of hourly wages, Israel, with a gap of 16.3%, is to be found between countries in which the gender gap is greater than 20% and countries in which the gender gap is lower than 10%.
Wage Levels, by Gender, 2013

In percentages, monthly averages

                                    Male employees   Female employees

Up to the minimum wage                   18.1              32.5

Minimum wage to 50% the average          5.0               6.2
wage

51% of minimum wage to 75% the           19.9              22.0
minimum wage

76% of minimum wage to average           14.7              13.5
wage

Average wage or less                     57.7              74.2

Up to twice the minimum wage             25.1              19.9

Twice the minimum wage to thrice         9.8               4.2
the minimum wage

Thrice the minimum wage to 4             4.1               1.1
times the minimum wage

4 times the minimum wage to five         3.0               0.6
times the minimum wage

More than 5 times the minimum            0.2               0.1
wage

Note: The figures here refer to employees who worked full time 12
months a year. The figure on p. 3 refers to a different population:
all employed persons regardless of number of months of the year
employed.

Source: National Insurance Institute, Wages and Income from Work by
Locality and by Various Economic Variables, 2013, Mark Rosenberg,
October 2015 (Hebrew).

Monthly Wages of Women as a Percentage of Monthly Wages of Men,
2000-2014

In NIS, Current Prices for 2014

Men Women

Monthly
Wage in NIS   2000    2001    2002    2003    2004    2005    2006

              61.6%   59.7%   61.5%   62.2%   63.3%   63.2%   63.4%

Monthly
Wage in NIS   2007    2008    2009    2010    2011

              64.2%   63.1%   65.9%   65.7%   66.2%

              New Series
Monthly
Wage in NIS   2012    2013    2014

              67.4%   68.1%   66.9%

Hourly Wages of Women as a Percentage of Hourly Wages of Men, 2000-
2014

In NIS, Current Prices for 2014

Hourly
Wage in
NIS       2000    2001    2002    2003    2004    2005

          82.7%   78.7%   81.0%   82.6%   84.2%   83.3%

Hourly
Wage in
NIS       2006    2007    2008    2009    2010    2011

          83.6%   84.0%   82.7%   84.5%   83.7%   83.0%

Hourly            New Series
Wage in
NIS       2012    2013    2014

          85.2%   85.6%   83.7%

Sources: Adva Center analysis of CBS, Income Survey, various years.
The figure for 2014 courtesy CBS Consumption Department, November
2015.

Gender Gaps in Hourly Wages, Selected Countries, 2013

In percentages

                          Women's Hourly
Country                Wage as a Percentage
                       of Men's Hourly Wage

Estonia                        29.9
Australia                      23.0
Czech Republic                 22.1
Germany                        21.6
Iceland                        20.5
Slovakia                       19.8
Great Britain                  19.7
Spain                          19.3
Switzerland                    19.3
Finland                        18.7
Hungary                        18.4
Denmark                        16.4
Israel (2014)                  16.3
Holland                        16.0
Norway                         16.0
Cyprus                         15.8
Sweden                         15.2
France                         15.1
Greece (2010)                  15.0
Ireland (2012)                 14.4
Latvia                         14.4
Canada                         14.1
Bulgaria                       13.5
Lithuania                      13.3
Portugal                       13.0
United States (2011)           10.6
Belgium                        9.8
Romania                        9.1
Luxemburg                      8.6
Croatia                        7.4
Italy                          7.3
Poland                         6.4
Malta                          5.1
Turkey (2010)                  3.8
Slovenia                       3.2

Sources: UNECE Statistical Database, December 2015; Figure for
Israel courtesy the Consumption Department, November 2015.


GAPS BETWEEN THE WAGES OF ASHKENAZIM, MIZRAHIM AND ARABS REMAIN SIGNIFICANT

The wage gaps between Mizrahi Jews (Israel-born to fathers born in Asia or Africa) and Ashkenazi Jews (Israelborn to fathers born in Europe or America) remain quite significant.

The figures below, taken from the new series of the Household Expenditure Survey of the Central Bureau of Statistics, are for 20122014.

In 2014, the wage income of Arabs was the lowest: 29% below the average.

The wage income of Ashkenazi Jews was 38% above the average and that of Mizrahi Jews 12% above the average.
Monthly Wages, 2012-2014

Total average monthly wage = 100

Year   Total   Ashkenazim   Mizrahim   Arabs

2012    100       142         111       68
2013    100       132         111       67
2014    100       138         112       71

Note: Second-generation Ashkenazi and Mizrahi Jews still comprise the
largest group of wage earners: 1,010, 200, compared with first
generation Jews - 766,500, and with third-generation Jews--835,600.

Sources: Adva Center analysis of CBS, Income Survey, various years;
the figure for 2014 courtesy the CBS Consumption Department, November
2015.


PENSIONS: INEQUALITY TO BE REPRODUCED IN THE NEXT GENERATION OF SENIOR CITIZENS

In 2014, households in the top income quintile put an average of NIS 1,224 per month aside for retirement, 14 times more than households in the bottom income quintile--NIS 89. When they retire, the standards of living of these households will be quite different from one another.

We need to keep in mind that the average includes both those who save for retirement and those who do not. Moreover, retirement savings are more prevalent among employees in the middle and upper classes than among employees with low incomes, despite the fact that saving for retirement is supposed to be mandatory.
Average Monthly Retirement Savings of Households,
by Income Quintile, 2000-2014

By net income per standard person, in NIS, 2014 current prices

                  2000   2002   2004    2006    2008    2010

Top Quintile       35     32       45      29      37      56
4th Quintile      112    107       93     124     155     136
3rd Quintile      219    232      237     275     284     327
2nd Quintile      386    438      493     452     518     574
Bottom Quintile   661    840    1,017   1,076   1,128   1,092

                  New Series

                  2012    2014

Top Quintile         74      89
4th Quintile        230     252
3rd Quintile        413     489
2nd Quintile        685     729
Bottom Quintile   1,131   1,224

Sources: Adva Center analysis of CBS, Survey of Household
Expenditures, various years. The figures for 2014 courtesy the CBS
Department of Consumption.


ONE OUT OF FIVE FAMILIES ARE POOR

The income of nearly one-fifth of Israeli families places them below the poverty line, defined as an income of 50% or less of the median family income in Israel.

In 2014 the poverty rate in Israel was 18.8%.

According to the OECD, in 2014 Israel "excelled" in poverty, as Its poverty rate was 1.7 times the average poverty rate among OECD countries: 11%.4

The gap between the Jewish and Arab populations of Israel is quite large: the poverty rate among Arabs is about three times that of Jews.

Among Jews, the highest poverty rate - similar to that of Arabs--is to be found among Haredi Jews.
Poverty Rate among Families in Israel, 2000-2014

After transfer payments and direct taxes, in percentages

                  2000   2002   2004   2006   2008   2010
Total
poverty           17.5   18.1   20.3   20.0   19.9   19.8
rate
Arab families     42.9   47.6   49.9   54.0   49.4   53.2
Jewish families   14.3   13.9   15.9   14.7   15.3   14.3

                  New Series

                  2012   2014
Total
poverty           19.4   18.8
rate
Arab families     54.4   52.6
Jewish families   14.1   13.6

Note: The poverty report of the National Insurance Institute for
2012-2014 does not include Bedouins residing in the Negev, whom the
Central Bureau of Statistics did not include in its household survey.

Sources: National Insurance Institute, Annual Report, various years
(Hebrew); National Insurance Institute, Poverty and Social Gaps,
annual report (Hebrew), various years.


SUMMING UP: INEQUALITY IN ISRAEL IS AMONG THE HIGHEST AMONG OECD COUNTRIES

There is one figure that summarizes the data presented in the preceding pages: the Gini coefficient.

The Gini coefficient examines the degree of inequality in countries on a scale of between 0 and 1: zero indicates a situation in which income divides up equally, while 1 indicates a situation in which all income is in the hands of one person.

The Gini coefficient in Israel is among the highest among OECD countries: in 2012, Israel, with a coefficient of 0.371, ranked fourth highest among 31 countries.

Since the middle of the 1980s, inequality--as measured by the Gini coefficient--increased in OECD countries by an average of 5.3%.

In contrast, in Israel it increased by 13.8%--from 0.326 to 0.271. (5)
Inequality
in OECD
Countries,
2012

Gini coefficient,
disposable income
after taxes and
transfer payments

Mexico           0.457
Turkey           0.402
United States    0.390
Israel           0.371
Great Britain    0.351
Greece           0.340
Portugal         0.338
Estonia          0.338
Spain            0.335
New Zealand      0.333
Italy            0.327
Australia        0.326
South Korea      0.307
France           0.306
Ireland          0.304
Luxemburg        0.302
Poland           0.298
Hungary          0.289
Germany          0.289
Switzerland      0.285
Holland          0.281
Australia        0.276
Sweden           0.274
Belgium          0.268
Finland          0.260
Iceland          0.257
Czech Republic   0.256
Norway           0.253
Slovenia         0.250
Slovakia         0.250
Denmark          0.249

Source: http://oecd.org


UNEMPLOYMENT IS A POVERTY TRAP

The average unemployment rate in Israel is low: 5.3% in October 2015. This compares favorably with the unemployment rate among Euro block countries: 10.7%. (6)

However, Israel's average unemployment rate conceals large gaps among localities and among population groups. Unemployment affects mainly the weaker sectors of society: it is much higher in Arab localities than in Jewish localities, higher in Jewish development towns than in affluent Jewish cities and towns, higher among women than among men and higher among Arab women than among Jewish women. Unemployment also affects those whom the education system has failed to provide with a decent education. It also affects young people who have not yet gained a foothold in the labor market and older adults who were laid off and cannot find new employment.

The table below presents figures from March 2015 on job seekers by locality, published on the website of the Government Employment Service. Job seekers are defined as persons who registered at Government Employment Service offices. However, many unemployed persons do not register, either because there is no office near their home, because they returned empty handed in the past or because they have despaired of finding work.

A better picture of the extent of unemployment might be obtained from Central Bureau of Statistics figures on unemployed persons (rather than job seekers), but such figures are not available by locality.

We decided to present figures on job seekers, as they enable us to see the differences among localities.

At the top of the table we find Arab localities, and at the very pinnacle, Bedouin localities in the Negev.

The largest Bedouin locality, Rahat, registered the figure of 31.35% of the workforce as seeking jobs. A similar percentage was found for some of the large Arab localities in the North--Umm el Fahm (29.8%), Arrabe (28.8%), Sakhnin (25.3%), Tamra (23.7%) and Maghar (23.4%).

In most Jewish localities, job seekers comprise less than 5% of the workforce. However, higher figures are to be found in several largely Mizrahi development towns, among them Dimona (15.1%) and Yeruham (13.8%).
Percentage of Job Seekers, by Locality, March 2015

In Percentages of the Workforce, in Descending Order

Locality                   Job-seekers as
                           a percentage of
                            the workforce

National Average                 6.3
Laqye                            393
Ar'ara-Banegev                   382
Rahat                            314
Tel Sheva                        313
Umm Al-Fahm                      298
Arrabe                           288
Deir Hanna                       257
Sakhnin                          253
Kuseife                          248
Judeide-Maker                    241
Tamra                            237
Mughar                           234
Kafar Kanna                      230
Bu'eine-Nujeidat                 222
Kafar Manda                      220
Ma'ale Iron                      207
Hura                             203
Bir El-Maksur                    191
Kabul                            181
Shefar'am                        174
Abu-Sinan                        173
I'billin                         167
Tur'an                           167
Ein Mahel                        166
Basma                            162
Tayibe                           153
Kafar Yasif                      152
Dimona                           151
Nazareth                         148
Akko                             145
Yafia                            141
Majdal Shams                     140
Yeroham                          138
Iksal                            135
Reineh                           135
Yirka                            133
Nahef                            131
Majd Al-Kurum                    126
Zefat                            126
Deir Al-Asad                     123
Rame                             120
Beit Jann                        116
Daburiyya                        116
Bet She'an                       115
Zarzir                           115
Fureidis                         107
Ofakim                           106
Jisr Az-Zarqa                    105
Sederot                          102
Abu Ghosh                        100
Kisra-Sumei                      100
Qiryat Mal'akhi                  100
Qjryat Gat                       98
Basmat Tab'un                    92
Netivoth                         92
Tirat Karmel                     91
Daliyat Al-Karmel                87
Ma'alot-Tarshiha                 86
Ar'ara                           86
Qalansawe                        83
Tiberias                         81
Nazerat Illit                    81
Isifya                           81
Qazrin                           81
Betar Illit                      77
Hazor Hagelilit                  76
Nahariyya                        75
Qiryat Yam                       75
Or Akiva                         74
Arad                             72
Be'er Sheva                      71
Kafar Qara                       71
Ashqelon                         69
Afula                            68
Zemer                            67
Migdal Haemeq                    67
Baqa-Jatt                        66
Ashdod                           65
Karmi'el                         61
Qjryat Atta                      60
Qiryat Shemona                   60
Lod                              59
Atlit                            55
Yoqne'am Illit                   52
Pardes Hanna-Karkur              52
Hadera                           51
Eilat                            50
Bet Shemesh                      48
Yavne                            48
Qiryat Bialik                    48
Jerusalem                        47
Qiryat Motzkin                   47
Ramla                            47
Bene Ayish                       46
Haifa                            46
Rekhasim                         46
Qiryat Eqron                     45
Netanya                          44
Binyamina-Giv'at Ada             43
Bat Yam                          43
Modi'in Illit                    43
Tira                             42
Be'er Ya'aqov                    41
Bene Beraq                       40
Kefar Yona                       40
Rehovoth                         40
Or Yehudah                       39
El'ad                            39
Gan Yavne                        38
Giv'at Ze'ev                     37
Petah Tiqwa                      36
Qadima-Zoran                     36
Oranit                           34
Mazkeret Batya                   34
Ramat Yishay                     34
Zikhron Ya'aqov                  33
Rosh Haayin                      33
Rishon Leziyyon                  33
Tel Mond                         33
Even Yehudah                     32
Nesher                           32
Qiryat Arba                      32
Ari'el                           31
Gedera                           31
Ganne Tiqwa                      31
Metar                            31
Ma'ale Adummim                   31
Holon                            30
Tel Aviv--Yafo                   30
Alfe Menashe                     28
Jaljulye                         28
Mevasseret Ziyyon                28
Nes Ziyyona                      28
Sha'are Tiqwa                    28
Bet Dagan                        27
Yehud                            27
Kefar Sava                       27
Kafar Qasem                      27
Pardesiyya                       25
Qiryat Tiv'on                    25
Ramat Gan                        25
Azor                             23
Giv'atayim                       23
Hod Hasharon                     23
Qarne Shomeron                   23
Modi'in-Makkabbim- Re'ut         22
Giv'at Shemu'el                  21
Herzliyya                        21
Kokhav Ya'ir                     21
Omer                             21
Zur Hadassa                      21
Qiryat Ono                       21
Ra'annana                        20
Shoham                           20
Lahavim                          19
Ramat Hasharon                   18
Efrat                            16
Bet El                           16

Source: Website of the Government Employment
Service: http://www.taasuka.gov.il


THE STATE FAILS TO REDRESS THE IMBALANCE RESULTING FROM ECONOMIC GROWTH

The socio-economic situation is not heaven-sent. Salaries can be raised and poverty can be reduced.

The main agent that can redress the imbalance is the state, firstly because it is the largest employer and as such can improve the remuneration of its own employees - either directly, as was done in a wage agreement between Minister of Finance Moshe Kahlon and chairperson of the Histadrut Avi Nissenkorn on December 23, 2015, thus setting an example, or through legislation like the Minimum Wage Law. The state is the relevant agent also because it determines the degree of generosity of the social safety net and thus the extent of poverty.

During the past three decades, the prevailing economic principle of successive Israeli governments has been reducing interventions on the part of the state in order to strengthen the business sector.

The result: weakening and shrinking of the social services that the state provides: schools, higher education, health, social welfare and social security. Total government expenditure (including that of local authorities) in 2014, which constituted 41.4% of GDP, placed Israel in the company of Eastern European countries and others with a tradition of low government spending, like New Zealand and Canada (which spend much less on defense than Israel).
Total Government Expenditure as a Percentage of GDP, 2014

Finland          58.3
France           57.5
Denmark          56.9
Belgium          55.1
Austria          52.6
Portugal         51.7
Sweden           51.7
Italy            51.2
Hungary          49.9
Slovenia         49.8
Greece           49.6
Holland          46.2
Iceland          45.7
Norway           45.6
Spain            44.5
Germany          44.2
Great Britain    43.9
Czech Republic   42.5
Japan            42.4
Luxemburg        42.4
Poland           42.1
Slovakia         41.6
OECD average     41.5
Israel           41.2
New Zealand      41.1
Canada           39.4
Ireland          38.3
United States    38.2
Estonia          38.0
Australia        35.9
Switzerland      33.7
South Korea      32.3

Note: Table made from bar graph.


HIGHER EDUCATION: ONE OUT OF THREE MAKE IT TO COLLEGE

The high road to a good personal future goes through higher education. The sectors of the economy that pay the highest salaries require a college degree.

By 2014, only 29.1% of young people who were 17 years old in 2006 had enrolled in an Israeli institute of higher learning under the auspices of the Council of Higher Education.

The road to higher education can be compared to the steps of a pyramid-shaped structure: The entire age group is to be found at the base, but with each step up, the size of the cohort decreases.

The pinnacle contains those pursuing a college degree. Following the steps up, we find that only 79.6% of the age cohort enrolled in a track leading to matriculation exams. Fewer -45.9%--passed the exams. Among those who passed, not all were qualified for college entrance --40% of the age cohort. Among the latter, only 29.1% had enrolled in a recognized institute of higher learning in Israel. If we add students enrolled in the Open University and in academic teachers' seminars, the percentage increases to about one-third.

The proportion of Jews going to college in Israel is double that of Arabs. However, many Arab youths go to college abroad, for example in Jordan. (7)

The above figures are for universities and colleges under the supervision of the Council on Higher Education and are based on admittance criteria set by that Council. They do not include the Open University and the teachers' seminaries.

The Open University does not have admittance criteria and it includes students of many ages. In the 2013/2014 academic year, 47,830 students were enrolled in the Open University, most of them aged 25 or more. There were 4,234 degree recipients that year.

Most of the teachers' seminaries are not under the supervision of the Council on Higher Education either, but rather that of the Ministry of Education, and their admittance criteria vary. In 2013/2014, 28,922 students were enrolled in teachers' seminaries, 90% of them undergraduates. If we add first-year undergraduates at teachers' seminaries to the figures of 2006 high school graduates who enrolled in institutes of higher learning by 2014, the figure for those going on to college within 8 years of high school graduates increases by 4.2%. (8)
The Cohort of 17-year-olds in 2006 and the Climb to College
Entrance by 2014

Enrolled in        29.1%     34.3%    18.9%
academic           33,432    30,233   3,214
colleges/
universities
by 2014

Qualified          40.0%     45.2%    28.4%
for college        45,870    39,819   4,823
admission

Passed             45.9%     50.8%    35.4%
matriculation      52,664    44,772   6,010
exams

Senior year of     79.6%     84.4%    75.2
high school        91,423    74,350   12,782

Total cohort of    100%      100%     100%
17 year-olds,      114,800   88,100   17,000
including
Haredi and East
Jerusalem youth

Sources: Adva Center analysis of CBS, Statistical Abstract of
Israel, various years; Ministry of Education, Culture and Sports,
Examinations Department, "Matriculation Figures," various years.


SUCCESS IN THE MATRICULATION EXAMS

The reason only a third of the age cohort goes to college is that too few take and pass the matriculation exams.

During the 1980s and 1990s, the success rate in the matriculation exams rose by 10 percentage points each decade: from 20% in 1980 to 30% in 1990 to 40% in 2000.

In the first decade of the twenty first century, the success rate experienced ups and downs, but remained short of 50%. In 2013, for the first time, the success rate exceeded 50%, going up to 53.4% and decreasing slightly in 2014.
Percentage of 17 Year-Olds Passing Matriculation Exams, 2003-2014

2003   2004   2005   2006   2007   2008

48.3   49.2   46.4   45.9   46.3   44.4

2009   2010   2011   2012   2013   2014

46.1   48.3   48.1   49.8   53.4   52.7

Note: Includes Haredi and East Jerusalem youth.

Sources: Ministry of Education, "Matriculation Exam Figures 2014"
(Hebrew), PowerPoint presentation, May 2015; Ministry of Education,
Matriculation Exam Figures, various years (Hebrew).


Below we present success rates in the matriculation exams for 2014 by locality, for localities with a population of 10,000 or higher. It is not hard to discern that the highest success rates--60% to 90%--are to be found in affluent localities, and that the lowest success rates are to be found in Arab localities and in some Jewish development towns.
Success Rates in the Matriculation Exams by Locality, 2013/2014

Localities with populations of 10,000 or more, out of the total 17
year-olds in the locality, in percentages

Locality                Proportion of
                         17-year-olds
                       who passed their
                        matriculation
                            exams

Tel Mond                      86
Beit Jann                     84
Even Yehudah                  83
Ramat Hasharon                83
Herzliyya                     82
Kefar Sava                    81
Qadima-Zoran                  81
Giv'atayim                    80
Hod Hasharon                  79
Yavne                         78
Binyamina-Giv'at Ada          76
Qiryat Ono                    76
Yehud                         75
Qiryat Motzkin                75
Ramat Gan                     75
Rishon Leziyyon               74
Ma'ale Adummim                73
Nes Ziyyona                   73
Gan Yavne                     72
Tirat Karmel                  72
Azor                          71
Nesher                        71
Rosh Haayin                   71
Bat Yam                       70
Mughar                        69
Nahariyya                     69
Netanya                       69
Sakhnin                       69
Tel Aviv--Yafo                69
Yoqne'am Illit                68
Petah Tiqwa                   68
Gedera                        67
Dimona                        67
Zikhron Ya'aqov               67
Nahef                         67
Holon                         66
Haifa                         66
Ojryat Atta                   66
Daburiyya                     65
Tamra                         65
Kafar Yasif                   64
Qiryat Yam                    64
Rehovoth                      64
Elat                          63
Ashqelon                      63
Isifya                        63
Qiryat Tiv'on                 62
Qiryat Eqron                  62
Nazerat Illit                 61
Pardes Hanna-Karkur           61
Or Yehudah                    60
Be'er Sheva                   59
Jat                           59
Hadera                        59
Majd Al-Kurum                 57
Yafi                          56
Kefar Yona                    56
Ari'el                        55
Ashdod                        55
Kafar Kanna                   55
Migdal Haemeq                 55
Ma'alot-Tarshiha              55
Afula                         55
Qiryat Gat                    55
Deir Hanna                    54
Karmi'el                      53
Netivoth                      53
Ramla                         53
Deir Al-Asad                  52
Kabul                         52
Majdal Shams                  52
Arrabe                        52
Qiryat Shemona                52
Givat Ze'ev                   51
Daliyat Al-Karmel             51
Yirka                         51
Fureidis                      51
Judeide-Maker                 50
Nazareth                      50
Akko                          50
Tur'an                        49
Sederot                       49
Qiryat Mal'akhi               48
Umm Al-Fahm                   47
I'billin                      47
Lod                           47
Laqye                         47
Arad                          47
Baqa Al-Gharbiyye             46
Tiberias                      46
Tire                          46
Kafar Manda                   46
Kafar Qasem                   46
Iksal                         45
Omer                          45
Shefar'am                     45
Kafar Qara                    44
Be'er Ya'aqov                 42
Ar'ara                        41
Qalansawe                     41
Bet Shemesh                   40
Tayibe                        40
Yeroham                       39
Ma'ale Iron                   39
Ar'ara-Banegev                38
Tel Sheva                     38
Abu-Sinan                     37
Ofakim                        36
Hura                          35
Zefat                         35
Reineh                        35
Kuseife                       31
Hazor Hagelilit               28
El'ad                         27
Rahat                         25
Jisr Az-Zarqa                 20
Jerusalem                     17
Rekhasim                      8
Betar Illit                   7
Bene Beraq                    5
Modi'in Illit                 4

Sources: Adva Center analysis of Ministry of Education,
Teleprocessing and Data Systems Department, "Proportion Taking and
Succeeding in Matriculation Exams, by Locality of Residence, 2013/
2014, May 12, 2015, website; CBS, Population of 17 Year/Olds 2013/
2014, November 2015.


HIGH SCHOOL VOCATIONAL TRACKS

In recent years a demand has been voiced, mainly by industrialists, to increase vocational education at the high school level.

This demand creates the impression that vocational education is a thing of the past. While it is true that vocational education is not as extensive as it was in the 1990s, when about half of all high school students were following vocational tracks, it is still significant, enrolling 36% of Jewish high school students and 41% of Arab high school students. (9)

Moreover, vocational tracks are still the main track available in high schools in Jewish development towns, poor neighborhoods and Arab localities. Often vocational tracks are found in so-called comprehensive high schools that include one or two academic tracks as well.

The main critique voiced over the years vis-a-vis vocational tracks has been that the educational achievements of their students are lower than those in academic tracks. The graph on the next page shows that 42.2% of persons graduating high school in academic tracks in 2006 had begun academic studies by 2014, compared with 33.1% of persons graduating high school in vocational tracks. (10)

The graph below shows the location of the schools of the two largest vocational education networks in Israel, ORT and Amal. Of the 159 schools belonging to these two networks, 113 (71%) were located in communities with a low socioeconomic ranking, 35 in Arab localities, 43 in Jewish development towns and 35 in other localities ranked in socio-economic clusters one through five.

In cases in which affluent localities do have vocational high schools, they are usually located in poor neighborhoods.
Dispersion of ORT and Amal Schools, by Type of Locality, 2014

In percentages

Arab localities            22%

Jewish localities          22%
in socio-economic
clusters 1-5

Most affluent localities   18%

Jewish localities          11%
in socio-economic
clusters 6-10

Jewish                     27%
development
towns

Source: Adva Center analysis of the websites of the ORT and
Amal networks, December 2014.

Note: Table made from pie chart.


WHO GOES ON TO COLLEGE?

The table below presents figures on persons graduating high school in 2006 who began studying in universities and academic colleges by 2014. The highest percentages are for Jews residing in localities ranked in high socio-economic clusters who were enrolled in academic tracks. The lowest percentages are for Arabs living in localities ranked in low socioeconomic clusters.

Among Jews there is a significant difference between the proportion of those studying in universities and academic colleges coming from academic tracks--42.2%--and those coming from vocational tracks - 33.1%. The proportion of high school graduates from localities ranked in the three highest socioeconomic clusters--53.9%--is double that of high school graduates from localities ranked in the four lowest socio-economic clusters -25.2%.

The proportion of women going on to college is higher than that of men: 39.3%, compared with 30.9%.
High School Graduates of Class of 2006 Who Enrolled in Universities
and Academic Colleges in Israel by 2014

By various characteristics, in percentages of total high school
graduates in each row

Total                        35.2%

Men                          30.9%
Women                        39.3%

Hebrew Education--Total      38.6%

Men                          34.0%
Women                        43.0%
Graduates academic track     42.2%
Graduates vocational track   33.1%
Reside in localities in
socio-economic clusters      25.2%
1-4
Reside in localities in
socio-economic clusters      39.0%
5-7
Reside in localities in
socio-economic clusters      53.9%
8-10

Arab Education--total        19.3%

Men                          15.7%
Women                        22.5%
Graduates academic track     20.1%
Graduates vocational track   18.4%
Reside in localities
in socio-economic            15.3%
clusters 1-2
Reside in localities
in socio-economic            22.9%
clusters 3-4
Reside in localities
in socio-economic            31.7%
clusters 5-10

Note: Most Arab localities are in socio-economic clusters 1-4.

Source: CBS, Israel Statistical Abstract 2015, September 2015.


MOST UNDERGRADUATES HAIL FROM AFFLUENT LOCALITIES

Another figure that demonstrates the gaps in higher education is the proportion of undergraduates among the 20-29 cohort in the locality.

During the 2013/14 academic year, 22.2% of 20-29 year olds from affluent Jewish localities were enrolled as undergraduates in universities or academic colleges in Israel. That proportion was 2.6 times that of 20-29 year olds from Arab localities-8.4%. In Jewish development towns the proportion-12.6%--was higher than that in Arab localities but much lower than that in affluent Jewish localities.

Differentiating between universities and academic colleges, it turns out that 11.2% of the age group from affluent Jewish localities was enrolled in universities, compared with 5.5% from Jewish development towns and 5.2% from Arab localities.

For academic colleges, the corresponding figures are 11.0%, 7.2% and 3.1%. The differences for academic colleges are disturbing in view of the fact that one of the purposes of the public academic colleges was to provide new opportunities for residents of Israel's socio-economic periphery. Unfortunately, CBS figures do not differentiate between public and private academic colleges.

Between the 2002/03 and the 2013/14 academic years, there was a slight decrease in the proportion of the 20-29 age group enrolled in universities: from 7% to 6.8%. At the same time, there was an increase in the proportion of the 20-29 age group enrolled in academic colleges: from 4.4% to 7.1%.11

The figures above do not include young people enrolled in the Open University and in academic teachers' seminaries. The latter constitute 2.5% of the age group.12 No such calculation can be made for the Open University, most of whose students are older.
Undergraduates Enrolled in Universities and Academic Colleges, 2013/14

By type of locality, as a percentage of 20-29 year olds

                           Universities   Academic colleges   Total

Affluent localities            11.2              11.0          22.2
National average               6.8               7.1           13.8
Jewish development towns       5.5               7.2           12.6
Arab localities                5.2               3.1            8.4

Note: Affluent localities are those in socio-economic clusters 8-10.

Sources: Adva Center analysis of CBS, Local Authorities in Israel 2013
database, CBS website. Figures regarding undergraduates at universities
and academic colleges courtesy CBS Higher Education Department, November
2015.

Note: Table made from bar graph.

Undergraduates in Universities and Academic Colleges, by Residence,
2013/14

Percentage of 20-29 year olds, localities with 30 students or more, in
descending order

                                Percentage of Undergraduates

Locality                     Total    Universities   Academic
                            percent                  Colleges
Omer                          33          17.4         15.5
Metula                       32.9         4.6          28.3
Lahavim                      32.7         19.4         13.3
Metar                        31.9         17.8          14
Kefar Shemaryahu             30.6         11.5         19.1
KefarTavor                   30.6         17.2         13.4
Kokhav Ya'ir                 30.5         18.9         11.6
Efrat                        29.2         19.4         9.8
Shoham                        29          16.5         12.4
Savyon                       28.9         10.8         18.1
Oranit                       28.4         17.7         10.7
Giv'at Shemu'el              28.3         20.1         8.2
Har Adar                     27.7         16.7          11
Kafar Kama                   27.4         12.8         14.6
Pardesiyya                   26.5         11.5         14.9
Modi'in-Makkabbim-Re'ut      26.4         13.7         12.7
Elqana                       26.3         20.6         5.8
Qiryat Ono                   26.3         12.1         14.3
Ra'annana                    26.3         13.7         12.7
Mazkeret Batya               26.1         11.9         14.2
Nesher                       25.1         18.3         6.8
Ganne Tiqwa                  24.4         12.3          12
Ramat Yishay                 24.3         12.2         12.1
Ramat Hasharon               23.8         10.6         13.1
Yesud Hama'ala               23.2          9           14.2
Bet Arye                     22.8         14.6         8.2
Alfe Menashe                 22.6         14.2         8.4
Qiryat Tiv'on                22.6         13.2         9.4
Rosh Pinna                   22.6         7.6           15
Even Yehudah                 22.4         10.7         11.7
Hod Hasharon                 22.3         12.1         10.3
Nes Ziyyona                  22.3         9.7          12.6
Me'ilya                      22.2         12.9         9.3
Herzliyya                    21.7         8.8          12.9
Fassuta                      21.7         13.2         8.5
Giv'atayim                   21.5         9.8          11.7
Qedumim                      21.3         17.2         4.1
Qiryat Motzkin               21.2         11.4         9.7
Gan Yavne                    21.1         8.4          12.7
Yehud                        21.1         8.9          12.1
Kefar Sava                    21          11.6         9.4
Zikhron Ya'aqov              20.1         11.3         8.8
Tel Aviv--Yafo                20          9.6          10.4
Gedera                       19.9         8.7          11.2
Migdal                       19.8         7.4          12.4
Rishon Leziyyon              19.6          7           12.5
Qarne Shomeron               19.1         13.4         5.7
Rehovoth                     19.1         9.2          9.9
Jish (Gush Halav)             19          11.8         7.2
Nahariyya                     19          10.6         8.4
Qiryat Bialik                 19          10.1         8.9
Bet El                       18.8         10.2         8.6
Karmi'el                     18.8         8.4          10.4
Mevasseret Ziyyon            18.8         9.9          8.9
Qadima-Zoran                 18.4         8.7          9.7
Haifa                        18.3         12.2         6.1
Petah Tiqwa                  18.2         10.4         7.8
Ramat Gan                    18.2         8.5          9.7
Rosh Haayin                  17.8         11.5         6.3
Tel Mond                     17.7         9.1          8.6
Yavne                        17.1         6.5          10.7
Qiryat Shemona                17          3.9          13.1
Yoqne'am Illit               16.9         7.8          9.1
Ma'ale Adummim               16.6          8           8.6
Nazerat Illit                16.4          7           9.4
Peqi'in (Buqei'a)            16.4         9.4          7.1
Hurfeish                     16.3         8.6          7.7
Givat Ze'ev                   16          6.5          9.5
Binyamina-Giv'at Ada         15.9         8.7          7.2
Rame                         15.8         9.7          6.1
Eilabun                      15.6         10.3         5.2
Afula                        15.6         5.6          10.1
Holon                        15.4         5.1          10.3
Ma'alot-Tarshiha             15.3         7.6          7.6
Shelomi                      15.3         8.3           7
Ashqelon                     15.2         6.1          9.2
Be'er Sheva                  15.2         6.9          8.3
Qiryat Atta                  15.1         7.9          7.2
Qiryat Yam                   14.9         7.8          7.1
Bene Ayish                   14.8         5.9          8.9
Netanya                      14.8         5.8           9
Ashdod                       14.7         5.8          8.9
Kafar Yasif                  14.7         10.2         4.5
Ma'ale Efrayim               14.7          9           5.7
Daburiyya                    14.5         8.4          6.1
Elyakhin                     14.3         4.7          9.6
Pardes Hanna-Karkur          14.2         6.4          7.7
Qiryat Eqron                 14.2         5.4          8.8
Ari'el                        14          11.9         2.1
Qazrin                        14          6.7          7.2
Qiryat Gat                   13.8         5.8           8
Bet Dagan                    13.4         5.8          7.7
Azor                         13.3         4.4          8.9
Yafi                         13.3         7.8          5.5
Akko                         13.3          8           5.3
Julis                        13.1          6           7.1
Kefar Yona                   13.1         5.3          7.9
Qiryat Arba                  12.9         4.4          8.5
Bet She'an                   12.8          6           6.7
Hadera                       12.7         5.3          7.4
Migdal Haemeq                12.6         4.3          8.2
Mizpe Ramon                  12.6         5.3          7.4
Sederot                      12.5         2.8          9.7
Tirat Karmel                 12.3         6.4          5.9
Be'er Ya'aqov                12.2         3.6          8.5
Sajur                        12.2         7.8          4.4
Or Akiva                      12          5.5          6.5
Kaokab Abu Al-Hija            12          9.5          2.6
Mughar                        12           7            5
Or Yehudah                   11.9         3.1          8.8
Tiberias                     11.7         6.2          5.5
Sakhnin                      11.7         6.9          4.7
Beit Jann                    11.6         5.2          6.3
Nazareth                     11.6         7.1          4.5
Elat                         11.4         8.1          3.3
Ghajar                       11.4         1.8          9.6
Dimona                       11.3         4.4          6.9
Hazor Hagelilit              11.2         3.9          7.3
Jatt                         11.1         7.9          3.2
Zefat                        11.1         5.5          5.6
Bat Yam                      10.8         3.9           7
Arad                         10.8         5.5          5.3
Deir Hanna                   10.3         5.6          4.7
Ramla                        10.2          3           7.1
Tamra                        10.1         7.8          2.2
Yeroham                      10.1         4.1           6
Qiryat Mal'akhi              10.1         3.5          6.6
I'billin                      10           8           1.9
Lod                           10          4.1           6
Judeide-Maker                 9.9          7           2.9
Mazra'a                       9.9         6.6          3.3
Kafar Qara                    9.8         6.2          3.6
Abu Ghosh                     9.7         5.4          4.3
Arrabe                        9.7          6           3.7
Qiryat Ye'arim                9.7         2.5          7.2
Yavne'el                      9.6         4.3          5.3
Tur'an                        9.5         6.5          2.9
Netivoth                      9.5          3           6.5
Daliyat Al-Karmel             9.4         5.6          3.8
Kabul                         9.4         7.4           2
Majdal Shams                  9.4         4.6          4.9
Nahef                         9.4         5.6          3.8
Kafar Kanna                   9.3         6.8          2.6
Tire                          9.2         5.7          3.5
Isifya                        9.1         6.7          2.4
Yanuh-Jat                      9          5.3          3.7
Yirka                          9          6.1          2.9
Ofakim                        8.9         2.5          6.4
Iksal                         8.8         4.9          3.9
Kafar Bara                    8.8         6.2          2.6
Jerusalem                     8.7         4.2          4.5
Kafar Qasem                   8.7         6.1          2.6
Shibli-Umm Al-Ghanam          8.7         5.3          3.4
Shefar'am                     8.7         5.9          2.7
Zemer                         8.6         5.4          3.2
Jaljulye                      8.3         4.8          3.5
Abu-Sinan                     7.9          6           1.8
Tayibe                        7.9         4.9          2.9
Meshhed                       7.9         5.9           2
Bu'eine-Nujeidat              7.6         5.8          1.8
Kisra-Sumei                   7.3         4.2          3.1
Bet Shemesh                   7.2         2.9          4.3
Umm Al-Fahm                   7.1         4.7          2.4
Reineh                        7.1         4.2          2.9
Massada                        7          4.9          2.1
Baqa Al-Gharbiyye             6.8         4.5          2.4
Majd Al-Kurum                 6.7         6.2          0.4
Sha'ab                        6.7         4.9          1.8
Ka'abiyye-Tabbash-Hajajre     6.6         3.6           3
Qalansawe                     6.4         4.4          2.1
Basma                         6.3         4.1          2.2
Buq'ata                       6.2         2.3           4
El'ad                         5.9         1.9           4
Ein Mahel                     5.9         4.1          1.8
Laqye                         5.8         3.3          2.5
Bi'ne                         5.7          5           0.7
Tuba-Zangariyye               5.4         2.1          3.2
Deir Al-Asad                  5.3         4.8          0.5
Ma'ale Iron                   5.2         3.1          2.1
Ar'ara                        5.2         2.8          2.4
Fureidis                      5.2         3.5          1.7
Zarzir                         5          1.8          3.1
Ilut                           5          2.3          2.7
Basmat Tab'un                 4.9         2.7          2.2
Tel Sheva                     4.6          2           2.6
Bir El-Maksur                 4.5         3.9          0.7
Kuseife                       4.3         2.5          1.9
Kafar Manda                   4.3          3           1.3
Bene Beraq                    4.1         1.3          2.8
Betar Illit                   3.8         0.8           3
Rahat                         3.8         1.3          2.5
Hura                          3.2         1.8          1.5
Rekhasim                      2.7         1.5          1.3
Ar'ara-Banegev                2.6         1.4          1.3
Modi'in Illit                 2.1         0.6          1.5
Jisr Az-Zarqa                 1.7         1.3          0.4

Sources: Adva Center analysis of CBS, Local Authorities in Israel
2013 database, CBS website. Figures regarding undergraduates at
universities and academic colleges courtesy CBS Higher Education
Department, November 2015.


HEALTH: THE BURDEN OF HOUSEHOLD PAYMENTS MORE THAN DOUBLED

We have seen that government expenditure in Israel is lower than that of Western European countries. This is clearly shown in the area of health, in the erosion of government funding for the universal basket of health services, which led to a doubling of the burden of household payments for health services.

Persons purchasing medical insurance policies in addition to national health insurance use those policies mainly to choose a surgeon or to get a second opinion, but also for medications and other services.

In 2000, the total burden of additional services paid out to health funds and private insurance companies was NIS 4.6 billion. In 2014, it was NIS 12.0 billion. These sums represent the total income of health funds and insurance companies from insurance policies and, in the case of health funds--co-payments.
Income of Health Funds and Insurance Companies, 2000-2014

In addition to health tax, in NIS billions, 2014 prices

                                    2000   2002   2004   2006

Health fund income from             1.1    1.5    2.0    2.2
  supplemental medical policies
Heath fund income from co-pays      2.4    2.9    3.3    3.5
Insurance company income from       1.2    1.5    2.0    2.3
  private medical policies
Total                               4.6    5.8    7.3    7.9

                                    2008   2010   2012      2014
                                                         (Estimate)

Health fund income from             2.7    3.2    3.7       4.3
  supplemental medical policies
Heath fund income from co-pays      3.3    3.2    3.3       3.4
Insurance company income from       3.0    3.2    3.8       4.3
  private medical policies
Total                               9.0    9.7    10.9      12.0

Source: Adva Center analysis of figures received courtesy
the CBS National Accounts Department, November 2015.


EROSION OF THE PRINCIPLE OF EQUITABLE AND UNIVERSAL SERVICE: MORE INCOME = MORE HEALTH SERVICES

Since households differ from one another in income, the moment the burden of financing goes from the state to the consumers of health services, the result is inequality in expenditures on health and inequality in health opportunities.

All pay more, but families with high incomes can afford to purchase more medical insurance than families with low incomes.

In 2014, the share of medical insurance policies above and beyond national health insurance accounted for 32% of household expenditure on health.

That same year, the average monthly expenditure of households in the top income decile on medical insurance purchased from insurance companies was NIS 260, and the average monthly expenditure on supplemental medical insurance policies purchased from the health funds was NIS 289. The total monthly outlay on extra insurance policies was NIS 548.

In contrast, the average monthly expenditure of households in the second lowest decile on medical insurance purchased from insurance companies was NIS 22, and the average monthly expenditure on supplemental medical policies purchased from the health funds was NIS 101, for a total of NIS 123 22% of the average expenditure of households in the top decile.

It should be pointed out that the above figures are averages and that they fail to reveal the fact that many households in the lower income deciles have no additional medical insurance.

Extra insurance policies are harmful in the following ways:

Firstly, they have an adverse effect on the universality of the public health system. Those with extra insurance policies receive priority when it comes to surgery.

Secondly, they result in senior physicians leaving public hospitals in the afternoon in order to perform private operations covered by extra insurance policies, leading to waiting lists for surgery in the public health system.

A survey of accessibility to health services by income bracket would probably find large discrepancies.
Total Monthly Expenditure of Households on Extra Medical Insurance
from Insurance Companies and from the Health Funds, Income Deciles 2,
6 and 10, 2000-2014

By income decile, net household income, NIS, 2014 prices

             2000   2002   2004   2006   2008   2010   2012   2014

Second Decile

Insurance
company       11     15     4      18     19     16     17     22
  policies
Health
fund          34     48     53     65     75     91     95    101
policies
Total         45     63     57     83     94    106    113    123

Sixth Decile

Insurance
company       35     34     40     56     48     84     65     87
policies
Health
fund          65     88    104    113    134    151    182    204
policies
Total        100    122    144    169    182    235    247    291

Tenth (Top) Decile

Insurance
company      118    128    135    202    197    243    226    260
policies
Health
fund         113    134    154    171    191    231    273    289
policies
Total        231    262    289    373    388    474    498    548

Source: Adva Center analysis of data received courtesy CBS Consumption
Department.

Total Monthly Household Expenditure on Extra Medical Insurance from
Insurance Companies and Health Funds, by Income Decile, 2014

By Net Income, in NIS and current prices

                Health funds   Insurance companies

10th decile         289                260
9th decile          272                173
8th decile          245                162
7th decile          228                121
6th decile          204                87
5th decile          178                76
4th decile          154                42
3rd decile          134                34
2nd decile          101                22
Bottom decile        78                 1

Source: Adva Center analysis of data received courtesy the CBS
Consumption Department, November 2015.


GAPS IN INFANT MORTALITY AND LIFE EXPECTANCY

We have seen that affluent families have more medical insurance than poor families.

However, health status reflects more than the financial ability to purchase extra medical insurance. Health status reflects the quality of life and general class-based differences: nutrition, the quality of the environment, place of residence, awareness of health hazards, the quality of transportation and employment, the distance from medical services and more.

Differences in quality of life are reflected in two main indicators, used throughout the world to demonstrate health discrepancies: infant mortality and life expectancy.

The figures published in Israel for these two indicators do not allow us to make distinctions beyond those between Jews and Arabs.

In 2013, average infant mortality in Israel was 3.1 per one thousand live births, positioning Israel in 14th place among OECD countries. The mortality rate has decreased sharply since 1970, among both Jews and Arabs. (13) However, today (2010-2014), infant mortality among Arabs--6.4--is still 2.6 times infant mortality among Jews.

The same picture emerges with regard to life expectancy at birth: in 2013, the life expectancy of men in Israel--80.3 years, positioned Israel in third place among OECD countries. In contrast, the life expectancy of women--83.9 despite that fact that it is higher than that of men, positioned Israel lower down--in 11th place among OECD countries. Life expectancy is on the rise. (14) At the same time, the life expectancy of Jewish men--81.1--is higher than that of Arab men--76.8, and the life expectancy of Jewish women--84.5--is higher than that of Arab women--81.2.
Infant Mortality, by Ethnicity

Number of deaths within a year per 1,000 live births

            Arabs   Jews

1970-1974   32.1    18.6
1980-1984   22.6    11.8
1990-1994   13.5    6.8
2000-2004   8.4     3.8
2005-2009   7.1     2.9
2010-2014   6.4     2.5

Source: CBS, Statistical Abstract of Israel 2015.

Note: Table made from line chart.

Life Expectancy at Birth, by Ethnicity and Gender, 1984-2014

                1984   1994   2004   2014

Arab men        71.5   73.8   75.5   76.8
Jewish men      73.5   75.9   78.5   81.1
Arab woman      74.2   77.1   79.1   81.2
Jewish woman    77.1   79.7   82.4   84.5

Source: CBS, Press Release, "Life Expectancy in Israel 2014,"
October 28, 2015 (Hebrew).

Note: Table made from bar graph.


Notes

(1.) Adva Center analysis of www.data.worldbank.org.

(2.) National Insurance Institute, Miri Endeweld and Oren Heller, Wages, the Minimum Wage and their Contribution to Reducing Poverty: Israel in International Comparison, National Insurance Institute, 2014, Working Paper 119 (Hebrew).

(3.) Adva Center, Gender Salary Gaps in Israel, 2015 Report, Yael Hasson and Noga Dagan-Buzaglo, December 2015.

(4.) National Insurance Institute, Annual Report, 2015 (Hebrew).

(5.) Adva Center analysis of OECD Stat.

(6.) October 1015: http://europa.eu/rapid/press-release STAT-15-6213 en.htm.

(7.) Khalid Arar and Kussai Haj-Yehia. 2013, "Higher education abroad: Palestinian students from Israel studying in Jordanian universities," Journal of Applied Research in Higher Education, 5(1), pp. 95-112.

(8.) CBS, Statistical Abstract of Israel 2015, Tables 8.48, 8.58, 8.59, 8.63; Website of the Open University.

(9.) CBS Statistical Abstract of Israel 2015, Table 8.19.

(10.) CBS, Statistical Abstract of Israel 2015, Table 8.48.

(11.) See Adva Center, Israel: A Social Report, various years.

(12.) Adva Center analysis of CBS, Database of Local Authorities 2013; Figures on undergraduates received courtesy CBS Higher Education Department.

(13.) http://data.OECD.org/healthstats/infant-mortality-rates.htm.

(14.) CBS, Press Release, "Life Expectancy in Israel 2014," October 28, 2015 (Hebrew).
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Author:Swirski, Shlomo
Publication:Israel: A Social Report
Article Type:Report
Geographic Code:7ISRA
Date:Dec 1, 2015
Words:9987
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