Israel's poverty rate highest in OECD

Israel had a poverty rate of 21% in 2010.

During the Shavuot holiday, the OECD gave Israel an unpleasant surprise in the form of its report on poverty and inequality in member states, a report in which Israel stands out.The OECD finds that Israel has the highest rate of poverty among its member states.

Israel had a poverty rate of 21% in 2010, up from just under 15% in 1995. This was the highest poverty rate in the OECD, followed by the rates in Mexico, Turkey, Chile, and the US, to round off the top five.

The OECD said that the poverty rate among the elderly (over 65) fell in 2007-10, but that the poverty rate among children and youths continued to rise.

The five OECD member states with the lowest poverty rates in 2010 were the Czech Republic, Denmark, Iceland, Hungary, and Luxembourg, with rates ranging from 6% in the Czech Republic and Denmark to 8% in Hungary, and Luxembourg. The average poverty rate in the OECD is 11%.

The OECD says that the global economic crisis of 2008-09 had relatively little impact on poverty rates in the world, at least during the period covered by the report, which was 2007-2010. Slovakia, Italy, Spain, and Turkey saw the largest rises in poverty rates as a result of the crisis.

The news on inequality between the rich and poor is not good for Israel either. The Gini coefficient, which measures inequality, places Israel among the top five countries in the OECD. The Gini coefficient is a scale from 0 to 1, in which 0 means perfect equality and 1 means that a country's total income is concentrated by a single person.

Israel, with a Gini coefficient of 0.37 in 2010, is ranked fifth in the OECD, behind Chile, Mexico, Turkey, and the US, in descending order, all of which have greater inequality than Israel. The OECD's average Gini coefficient is just over 0.3.

Not everything is so grim for Israel. The OECD states that Israel is one of the few member states with income growth across all households (rich and poor), and the report covers the years in which the global economic crisis was at its height. However, the OECD says that, during this period, the income of salaried employees fell, but the income of the self-employed and capital gains rose.

Published by Globes [online], Israel business news - - on May 16, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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