The income of a family in the top decile is 11.8 times that of a family in the bottom decile. Average income for a wage-earning family last year came to NIS 11,230 gross per month, a real increase of only 6% compared to 1997. This emerges from a survey of income differentials in Israel, conducted by the Central Bureau of Statistics in 1998.
According to this survey, net of compulsory payments, such as income tax, national insurance and health tax, the net income of a family of wage earners came to NIS 8.610 a month, a 1% real increase.
The Central Bureau of Statistics survey exposes large gaps in income distribution in the economy, between rich and poor, between wage-earners and the self-employed, and especially between those in employment and the jobless. The GINI coefficient (index of inequality) last year reached 0.379 points, an increase compared to 1997. Inequality also increased among the families of the unemployed. The net income ratio of a top decile family to that of a bottom decile family reached 8.3 last year. This is a sharp increase as against 7.4 in 1996.
The figures show that the average monthly income of a self-employed family last year reached NIS 14,120, 26% higher than that of a wage-earning family.
The figures also indicate that the average income of a family of unemployed persons last year reached NIS 3,700 gross, a real increase of more than 3%. Disposable income, after the various compulsory payments, amounted to NIS 3,500, a 2.8% real increase. This figure points to a progressive taxation system, partially reducing income gaps.
Net average per capita income reached NIS 3,180 for a self-employed family, NIS 2,840 for a wage-earning family, and NIS 1,670 for a family of unemployed. Net per capita income, reflecting living standards, indicates a gap ratio of 1.7 in favor of wage earners.
The share of the top decile in total income increased to 28% in 1998, compared to 23.7% in 1988. In that period, the weight of the bottom decile in total income decreased from 2.8% to only 2.4%.
The share of the top five deciles comes to 76% of total income, while that of the bottom five deciles comes to only 24%.
Published by Israel's Business Arena December 20, 1999