As you may know, we’re big fans of the Taub Center, Israel’s leading nonpartisan research institute whose data-driven analysis is used to shape Israel’s socio-economic policies.
The Taub Center has just released its annual report A Picture of the Nation 2023 which focuses on important data in the areas of economics, labor, welfare, health, education, demography, and a new area of research for the Center, environment and health. The data indicate some measure of improvement in certain areas, like a rapid recovery of the growth in GDP, low levels of unemployment, rising levels of benefits for senior citizens, high life expectancy, and a rise in teachers’ wages alongside a decline in the number of students per teacher. In contrast, GDP per capita in Israel is very low, the cost of living is high, poverty rates are high, and there are inequalities among populations in terms of health and education.
Health
The healthcare system continues to deal with the same challenges that it suffered from prior to the COVID pandemic, both in terms of health outcomes and labor force and budget inputs. The healthcare basket of services has been eroding continuously and has not been updated according to the metrics advised by a variety of professional committees convened over the years. Low public expenditure leads to long waiting times for healthcare specialists, a shortage of manpower and essential medical equipment. All of this is even more pronounced in the periphery of the country. Of particular concern is the rise in the consumption of strong pain medications (opioids). In 2020, Israel ranked among the highest worldwide in opioid consumption, although since then there has been a gradual reduction in prescriptions for fentanyl and other opioid medications. Labor Market
The labor market has completed its recovery from the COVID pandemic. Employment levels among men have returned to their pre-COVID levels, and women’s employment levels have returned to their trends of several decades. Worker wages are rising, though not in a uniform manner. Workers in high tech have the highest wages and they are increasing at a faster rate than wages for workers in other sectors. Also within the high tech industry, there are large differences between jobs and wages. Welfare
The levels of poverty and income inequality in Israel remain very high relative to other high-income countries. This is particularly true with regard to families with children, and especially very young children, with ensuing life-long impact in terms of their children’s future success. Expenditure on social security and health rose during the COVID period but has since dropped again, sometimes to under the pre-COVID level. A good example of this is unemployment benefits. A positive change is the substantial rise in expenditure for long-term care insurance and on income support for seniors with low income. Education
In contrast to public perception, the majority of indicators show that the state of affairs in the education system is improving. Budgets have grown, the number of students per class has shrunk, student achievements have improved for the most part, gaps between education systems under different supervisory authorities have narrowed, and the level of education of teachers has risen. Macroeconomics
Israel’s economy has rebounded since the COVID pandemic, although not all of its components have recovered to the same extent. Despite a decline in demand for workers, the share of workers in high tech in the labor market continues to grow, and wage disparities between workers in high tech versus those in other industries continue to widen. The lack of equality stems in part from a shortage in capital in Israel, both private and public, and low worker productivity outside of the high tech field. The government’s plan for judicial reform has brought about economic uncertainty that has been witnessed in the first months of 2023 by a weakening of the Israeli shekel. While neither Moody’s nor Fitch have changed Israel’s credit rating, they have expressed concerns regarding the impact on the country’s economy of this legislation and the effects of the lack of consensus within Israel. Demography
Israeli society is undergoing a number of demographic changes. The share of married men and women is declining, people marry at later ages and are having fewer children. The divorce rate in the non-Jewish population is on the rise, and the divorce rate among Muslim women aged 25 and older is now approaching that of the Jewish population. Women live longer than men, and life expectancy in Israel is high relative to that in other OECD countries. To read the full report and learn more click here.