Full Breakdown
The Growing Economic Divide in Israel: An Analysis of Haredi and Non-Haredi Contributions
2/18/2026, 11:51:00 PM
Economic Disparities Revealed
A recent study published in the Israel Economic Review has highlighted significant economic disparities between haredi (ultra-Orthodox) and non-haredi Jewish households in Israel. Conducted by Ariel Karlinksy, Tom Sade, Eran Yogev, and Dr. Michael Sheral from the Kohelet Forum, the study titled "On Taxes and Wonders" provides a comprehensive analysis of the financial contributions and benefits received by these two groups. It reveals that, on average, non-haredi households contribute 8,842 shekels per month to the state, while haredi households receive 5,983 shekels per month in state benefits, resulting in a net gap of nearly 15,000 shekels.
Methodology and Findings
The study stands out for its methodology, which goes beyond traditional analyses that focus solely on income tax versus allowances. It incorporates indirect taxes such as VAT, excise tax, and corporate tax, alongside various public services like education and health. This comprehensive approach allows for a clearer understanding of the financial dynamics at play. The findings indicate that the economic gap has widened since the original data collection period of 2016 to 2018, suggesting a growing reliance of the haredi community on state support.
Proposed Solutions to Economic Imbalance
Dr. Michael Sheral, the head of the Kohelet Forum, argues that merely adjusting the budget will not suffice to address these disparities. In his policy paper, "Two Types of Inequality - The Israeli Paradox," he advocates for broad structural reforms across multiple sectors, including education, labor, taxation, and military service. Sheral emphasizes the need for integrated reforms that would increase the number of economic contributors and reduce dependency on state transfers.
Key recommendations include expanding core studies in all education systems to better prepare students for the modern economy, reducing public funding for educational frameworks that do not facilitate this integration, and increasing employment incentives. Additionally, he suggests revising benefits that encourage childbirth without adequate economic means and expanding mandatory military service to ensure a more equitable distribution of the security burden.
Criticism and Opposition
While Sheral's proposals aim to address the economic imbalance, they have not been without criticism. Opponents argue that such reforms may disproportionately affect vulnerable populations within the haredi community, who may struggle to adapt to the proposed changes. Critics also express concern that increasing military service requirements could further alienate segments of the population that traditionally do not participate in the military.
Conclusion
The findings from the Kohelet Forum's study underscore a critical economic divide in Israeli society, highlighting the urgent need for comprehensive reforms. As the gap between haredi and non-haredi households continues to grow, the proposed structural changes may be essential for fostering a more equitable economic landscape in Israel. The ongoing debate around these issues reflects broader societal tensions and the complexities of integrating diverse communities within the national framework.
