An Overview of Social and Economic Issues in Israel Update for the UJC Overseas Marketing Group, Feb

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An Overview of Social and Economic Issues in
Israel Update for the UJC Overseas Marketing
Group, February 2, 2006
Professor Jack Habib Myers-JDC-Brookdale Institute
H\PR Materials\Lectures Slides\Jack's
Lectures\2006\UJC marketing update 2-2-06
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Myers-JDC-Brookdale Institute
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Myers-JDC-Brookdale Institute
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The Big Picture

• Deepest social crises since the 50's poverty,
  educational gaps, deviance and dependency
• Changes in the structure of the economy
• Deep cuts in social safety net and shift in
  economic and social strategy
• Minority groups most severely affected
• Fierce debate on social and economic policies
• Extensive reform in social services do better
  not only more or if cant do more
• Israel needs to "try harder"

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Structural Social Challenges of Israeli Society

• Very high heterogeneity in social capital among
  Israel's population
• Education
• Family size
• Women's participation in the labor force
• Very high ratios of immigration
• Very high percentage of immigrants are refugees

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Structural Social Challenges of Israeli Society

• Significant cultural variation within the Jewish
  population
• Religious, cultural and national differences
  between the Jewish and Arab population against
  the background of armed conflict with Israel's
  Arab neighbors
• A very high correlation between cultural
  background and social capital
• High percentage of defense expenditure in the
  national budget

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Goals in Addressing Poverty

• Preventing the creation of poverty before taxes
  and transfer payments
• Cash support or subsidization of services for
  the poor to ease financial burden and reduce
  gaps, through progressive taxation
• Preventing negative implications of poverty for
  the functioning of families and the development
  of children, by subsidizing services for children
  and by providing special services
• Preventing poverty in the future reducing gaps
  in human capital among young adults entering the
  IDF and the work force

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• Definition
• Poverty line- 50 of median family
  disposable income.
• In 2004, about 4,500 per year for a single
  person and 12,000 per year for a couple with 2
  children.

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Monthly Poverty Line, 2004

• Number of persons in
  Monthly poverty line
• household
  (shekels)
• 1 1,777
• 2 2,843
• 3 3,766
• 4 4,548
• 5 5,330
• 6 6,041
• 7 6,751
• 8 7,391
• 9 7,959

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of Households below the Poverty Line Within
Different Family Types, 2004
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The Composition of Families in Poverty by Number
of Children, 2004
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Increase in Poverty in 2004/5

• The National Insurance Institute (NII) has
  instituted a new policy to publish data every six
  months. New data just released deals with the
  period between July 2004 to June 2005 (2004/5)
• 20.5 of households living below the poverty line
  (403,400 households)
• 24.1 of persons living below the poverty line
  (1,580,200 persons)
• 34.1 children living below the poverty
  line(738,100 children)

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Numbers and Rates of Poverty among Households,
and Persons and Children Living in these
Households

• 2004 July 04-June 05
• Numbers below the poverty line
• Households 394,200
  403,400 Persons
  1,534,300 1,580,200
  Children 713,600
  738,100
• Percentage below the poverty line
• Households 20.3
  20.5 Persons
  20.3
  24.1
• Children 33.2
  34.1

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Myers-JDC-Brookdale Analysis of Labor Force
Surveys
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Myers-JDC-Brookdale Analysis of Labor Force
Surveys
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The Number Receiving Income Maintenance
Benefits, 1985-2004, in Thousands
National Insurance Institute
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Matriculation Rates of Youth, by SES of Community
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of Ethiopians Eligible for Matriculation
Compared to all Jewish Youth by Level , Out of
the Entire Age (17) Group, 2004
Level 1 General eligibility Level 2
Eligibility at a level that meets university
requirements
Source Myers-JDC-Brookdale Institute
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Educational Outcomes at Age 17 for Ethiopian and
All Jewish Youth - 2004
Excluding the Haredi population
Source Myers-JDC-Brookdale Institute
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Criminal Files Opened for Ethiopian Youth in
Israel, 1996-2004
Source Myers-JDC-Brookdale Institute
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Percent Increase in Criminal Youth Files in
Israel, 1996-2004
Source Myers-JDC-Brookdale Institute
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Ethiopians Age 18-64 by Years of Education,
2003/2004
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Employment Rates of Ethiopian Israelis 18-64, by
Gender 1995/96 to 2003/2004 in Comparison with
Total Jewish Population
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Years of Education of Arab Women Ages 18-64,
1995 and 2003 (in )
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Years of Education of Jewish and Arab Women,
Ages 18-64, 2003 (in )
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of Jewish and Arab Girls 14-17 not Attending
School Under the Supervision of the Ministry of
Education, 1980-2002
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Employment Rates of Jewish and Arab Women Ages
18-64, 1995 and 2003
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Employment Rates of Jewish and Arab Women, Ages
18-64, by Years of Education,1995 and 2003
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Estimates of Children at Risk

• 15 (320,000) at risk
• More among
• Single parent families
• Large families
• Arabs
• Immigrants from Ethiopia and FSU
• Low SES neighborhoods

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Some Major Traditional Indicators of Risk Among
Children and Youth

• 8 Known neglect and abuse
• 2.4 (52,000) physical neglect
• 0.7 (15,582) physical abuse
• 4 Known family violence and dysfunction
• School dropout and disengagement
• 11-30 of the 6-11th graders are disengaged
• 30 of Arabs and 10 of Jews do not complete 12th
  grade

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Marginal Behaviors Violence, Alcohol Abuse,
Drug Abuse (youth ages 11-16)
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Cutbacks In Government Expenditures

• Unparalleled in intensity and rapidity
• To avoid high government deficits and loss of
  confidence in shekel
• Also reflects major shift in economic strategy
  to promote growth, Israel needs lower taxes and
  lower government expenditure
• Concern with rise in dependency in 1990, 40,000
  families on welfare today 160,000

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Cutbacks In Government Expenditures

• Shift in social strategy balance between
  supporting the poor and supporting efforts to
  enable and encourage the poor to become
  independent
• Therefore, severe cutbacks in all forms of cash
  assistance other than for elderly and disabled
• However, across the board cut in ministries is
  impacting on all educational and social services
  for the poor
• Has led to major concern about the consequences
  for the extent of poverty and the well being of
  the poor

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Four Significant Reforms for Children
Dovrat National Task Force Major Reform in the
Education System
Prime Minister's Committee for At Risk and
Disadvantaged Children and Youth (Schmid
Committee)
Mainstreaming Legislation in Special Education
Balancing Out-of-Home and Community Based
Care Towards the Community
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Other Reforms
Welfare to work
Inclusion of Mental Health Services in National
Health Insurance
Transfer of Well-Baby Services (Tipot Halav)
Privatization, Competitive Bidding and
Performance based contracting in Social Services
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Key Issues

• The role of government, voluntary sector and
  philanthropy
• The role municipal and national levels of
  government
• Balance between income support and direct
  services
• Balance between support and efforts to enhance
  employment and earnings
• Efforts to expand services and efforts to make
  services more effective

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Poverty in Israel and Policies Aimed at Reducing
It Presented by Raviv Sobal Deputy Director
of the Budget Department, Ministry of Finance to
the Myers-JDC-Brookdale Board, December 12, 2005
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Principles in Choosing Policies

• Avoid returning to cash benefits and the poverty
  trap
• Create incentives to work and remove obstacles to
  work
• Increase net income for low wage earners
• Decrease expenses for working poor
• Long-term measures with high returns

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Removing Obstacles to Employment

• Significantly subsidize child day-care centers
  for working mothers
• Subsidize public transportation in areas of high
  unemployment
• Expand vocational training
• Decrease taxation on low wage earners
• Establish industrial parks in Arab villages
• Decrease number of foreign workers

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Policies for the Elderly

• Strengthen residential and in-home services for
  the frail elderly
• Establish supported communities and day-care
  centers for the elderly
• Encourage savings for retirement
• Promote reverse annuity mortgages to enable the
  elderly to consume some of the value of their
  homes

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Investments in Social Welfare and Education

• Strengthen programs for children at risk
• Lengthen pre-school hours in disadvantaged
  neighborhoods and localities
• Expand programs to promote educational excellence
  in disadvantaged neighborhoods
• Expand technological education for youth and
  special populations
• Narrow education gaps in the Bedouin sector in
  the Negev

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The Program of the Myers-JDC-Brookdale Institute

• We view the Institute as playing an important
  role in this critical national effort
• Helping us learn from the international
  experience
• Providing key analyses of the issues and trends
  that are needed to make better decisions
• Monitoring the implementation and the impact of
  major policy initiatives addressing poverty
• The institute's proposed program certainly
  reflects this agenda and we believe that this
  issue needs to continue to receive major priority
  in the years ahead