Income gaps in Israel widen

Wealth gap

The Gini inequality index rose in 2018, after declining for three consecutive years, although on average income grew faster than spending.

Inequality in Israel increased in 2018, after declining for three consecutive years, according to household spending and income figures published today by the Central Bureau of Statistics. The figures show that the Gini income inequality index in Israel rose from 0.351 in 2017 to 0.355 in 2018.

The figures also show a steep increase in a family's average health spending, and that the proportion of income in Israel received by the highest-earning tenth of the population grew, reaching almost one quarter of all income. In the lowest-earning three tenths of the population, monthly spending was higher than monthly income, probably indicating that this group had to live off their savings or take loans in order to make ends meet.

The Central Bureau of Statistics published the results of a household spending survey for 2018 today. The survey covers all of the public's spending and income. The figures show that household spending on health shot up 5.3% in 2018, and spending on food was up 2.9%, after fruit and vegetable prices rose steeply in 2018. Household spending fell on clothing and footwear (4.9%) and education, culture, and entertainment (4.4%).

The good news is that family income grew faster than spending. Average household income was up 4.3% in real terms, while average family spending rose by only 0.5%. Average monthly household gross income in Israel was NIS 21,063 at the end of 2018, and average monthly household net income was NIS 17,276. Average monthly household spending was NIS 16,475, meaning that the average household in Israel managed to save NIS 801 per month.

The average figures do not, however, reflect the differences between the socio-economic groups, mostly in income. The average income in the highest-earning tenth of the population in Israel was 8.4 times that of the lowest-earning tenth, while monthly spending in the top tenth was only 2.4 times that of the lowest-earning tenth.

The highest-earning tenth of the population, which had NIS 40,254 or more in net monthly income in 2018, increased its share of total net income from 22.2% in 2017 to 23%. The next highest-earning tenth of the population averaged NIS 25,671 in monthly net income, while the lowest-earning tenth of the population's monthly net income averaged NIS 4,786.

Published by Globes, Israel business news - en.globes.co.il - on November 26, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

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