Bank of Israel report: Poverty declining

from Globes

The Arab and ultra-orthodox populations constitute 60% of all poor.

The Bank of Israel states that poverty in Israel declined in 2006 after rising in the three preceding years. The central bank has released excerpts from the "Issues in Welfare Policy" section of its 2006 Annual Report. The full report will be published on April 11.

The Bank of Israel said poverty among individuals, as measured by the relative index customarily used in Israel, rose in 2005 to 24.7%, but fell to 24.4% in the year to June 2006. “Alternative poverty indices, which reflect the ability to purchase a basket of essential goods or a fixed basket, show a fall in poverty in 2005, after rising for the three preceding years. 40% of the poor managed to consume more than the amount indicated by the poverty line. However the high incidence of poverty over the years makes it difficult for the weaker sections of the population to maintain a reasonable standard of living, so that the level of consumption of 60% of the poor, as well as their income level, is below the poverty line.

“The incidence of poverty is particularly high among Arabs, and especially among the Bedouin (66.4% poverty) and the ultra-orthodox (Haredim). The Arab and ultra-orthodox populations constitute 60% of all the poor, a rate that has grown significantly over the years. The rise in poverty among these groups accounts for most of the change in the incidence of poverty in general. Poverty among the weaker populations grew mostly due to the comprehensive cutbacks in transfer payments from 2002 - as these groups are heavily dependent on welfare payments - and a fall in their participation in the labor market. In some of the weaker groups, however, for example those with low levels of schooling, their participation in the labor market increased slightly at the end of the period.

“Child poverty, as measured by the relative indices, rose by 2 percentage points in 2005 to an unprecedented 35.2%, which is high also by international comparison. The high rate of child poverty not only harms the children's current standard of living, but also adversely affects the creation of human capital, which is important for future earning power.