Poverty and inequality in Israel is high and worrying, the National Insurance Institute says

Following the economic impacts of October 7, 2023, and the coronavirus pandemic, 2023 continued to be a “socioeconomically worrying” year, National Insurance Institute Vice CEO of Research and Planning Nitsa Kasir said in a report.

“The extent of poverty in Israel is among the highest in developed countries," said the report, highlighting that the rate of poverty influenced by economic growth, is very high in international comparison. 

The NII also said inequality is high compared to other developed countries.

Nearly two million people were under the poverty line in Israel in 2023, including over 870,000 children and over 150,000 senior citizens.

This means Israel had 20.7% poverty in the general population and 27.9% and 12.8% among children and seniors, respectively.

The NII also highlighted the climbing cost of living, highlighting that in 2023, the cost of living was 4.2% higher than the previous year, and that followed a 4.4% increase in the year before.

“The cost of living impacts all of Israeli society. However, the burden on the population is not evenly distributed, as the relative economic strain is deeper and more severe for populations already facing financial hardship,” Kasir said.

High levels of poverty among haredi, Arab-Israeli populations 

When looking at poverty across different populations, the institute highlighted that poverty levels are very high among the haredi (ultra-Orthodox) and Arab populations.

Poverty among Arab families stood at 38.4% in 2023, slightly down from 38.9% in 2022. Poverty among ultra-Orthodox families also dropped slightly from 33.9% in 2022 to 33% in 2023.

The part of the poor population that was Arab or haredi stood at 64.9%, more than double their population share, the NII said.

Poverty levels were also higher among those from the North, the South, and Jerusalem.

The institute said that while the pandemic and the war hurt growth and exacerbated inequality, government assistance and social budgets meant that poverty, measured only by income levels, did not increase in almost all populations.

General poverty levels remained almost unchanged, slightly decreasing, in fact, going from 20.8% to 20.7%, and among families from 20.3% to 20.1%.

Without government intervention, poverty would have been more widespread and increased slightly, the NII said.

“These developments highlight the critical importance of the social safety net during times of crisis in assisting low-income individuals whose earnings have decreased,” the report said.

“Since October 7 and the outbreak of the war, the significance of the welfare system and the social safety net has extended not only to addressing income reductions but also to financing the increased expenses incurred by certain populations due to these events.”

The aid provided for those harmed was significant but did not help all of those in need equally, the NII said, highlighting freelancers as a population for whom aid was insufficient.

“The significant expenses of the war will necessitate budget cuts and finding funding sources. Care must be taken to ensure that these cuts do not harm the weaker segments of society, whose socioeconomic situation is already problematic.”