1.92 million poor people lived in Israel in 2020, 864.6 thousand of them children, and 158.7 thousand of them people over retirement age, according to the National Insurance Institute's annual Poverty Report, released today.
The poverty line as calculated in relation to median net income per capita, was NIS 2,811 income monthly in 2020. The addition of other income elements, such as investment income and support other than from National Insurance, raised the poverty line by NIS 230.
This is the second year in which the National Insurance Institute has issued a report of the socio-economic situation based entirely on its own administrative data, and not on the basis of responses to a survey by the Central Bureau of Statistics. The transfer of data from the survey of household expenditure, on the basis of which the report's statistics were calculated in previous years, has been delayed.
The coronavirus pandemic led to a severe economic crisis in 2020. GDP shrank by 2.5%, and the number of people employed fell by 9.4%. Both mean and median average income fell. Most of the working population was affected by the decline, but the worst affected were those whose pay was low even before the crisis.
According to the poverty line calculations for 2020, a single person household needed NIS 3,514 monthly to stay above the line, while a family consisting of two parents and one child or a single mother and two children needed NIS 7,450 monthly. A couple with two children needed NIS 9,000 monthly to stay above the poverty line.
The rate of poverty measured according to` economic income rose substantially between 2019 and 2020. Among families, the incidence of poverty rose from 36.7% to 40.8%. The incidence of poverty among individuals rose from 32.2% to 36.3%, and among children it rose from 36.5% to 40.9%.
The Gini index of inequality in economic income distribution rose by a sharp 4.2%. Rates of poverty measured by net income, however, actually fell. The incidence of poverty fell by 0.8% to 20.4% among families, and from 21.6% to 21.0% among individuals. Among children, the decline was smaller: 0.5%. The sharpest decline in the incidence of poverty was among elderly individuals, from 15.8% in 2019 to 13.5% in 2020. The improvement in the incidence of poverty among individuals, children, and the elderly continues a trend going back to the middle of the previous decade, according to the National Insurance Institute.
Excluding government intervention, that is, taking economic income only, median per capita income fell by 10.2% in real terms in 2020. In general, welfare spending as a proportion of GDP in Israel is among the lowest in the OECD countries, but in 2020, the additional aid given because of the coronavirus pandemic was close to the OECD average.
Without government intervention, the incidence of poverty would have risen from 36.7% to 40.8% among families, from 32.2% to 36.3% among individuals, and from 36.5% to 40.9% among children.
The actual decline in poverty characterized almost all sections of the population, except for families where the breadwinner was self-employed, among which the incidence of poverty rose from 12.6% to 13.7%.
Estimates for 2021 on the basis of partial data and simulations indicate fairly stable poverty levels on the basis of economic income, but a rise in the various measures of poverty on the basis of net income. Moreover, the growth in the economy in 2021 has not penetrated to the entire population, and, according to the estimates, inequality on the basis of net income was 3.3% wider this year than in 2020.
Published by Globes, Israel business news - en.globes.co.il - on December 29, 2021.
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