Israel’s poverty rate remains among the highest in developed nations, second only to Costa Rica, according to a new report from the National Insurance Institute. The findings reveal that Palestinians citizens face the highest poverty rates at 38.4 per cent, significantly above the national average.
Nearly two million Israelis, representing one-fifth of the population, live below the poverty line. Without government assistance programmes, the poverty rate would have reached 31.1 per cent instead of the current 20.7 per cent of the population. There was a 15.2 per cent increase in government payments last year.
Young people under 29 have been particularly affected, with 47.2 per cent living below the poverty line. The situation is especially dire for families with children, as 872,000 children – 27.9 per cent of all children in Israel – live in poverty.
The report comes amid broader economic challenges, with Israel’s GDP growth plummeting from 6.5 per cent in 2022 to just two per cent in 2023. Rising prices have disproportionately impacted vulnerable populations, with 9.7 per cent of households foregoing medical treatment due to financial constraints.
Geographically, the highest concentrations of poverty are found in occupied Jerusalem, where 36.2 per cent of families are classified as poor, followed by the country’s northern and southern regions, with poverty rates of 22.5 and 22.6 per cent respectively.
Despite government intervention reducing individual poverty by 33.5 per cent and family poverty by 41.2 per cent of households foregoing medical treatment due to financial constraints.
Geographically, the highest concentrations of poverty are found in occupied Jerusalem, where 36.2 per cent of families are classified as poor, followed by the country’s northern and southern regions, with poverty rates of 22.5 and 22.6 per cent respectively.
Despite government intervention reducing individual poverty by 33.5 per cent and family poverty by 41.2 per cent, Israel’s poverty reduction efforts still lag behind other OECD countries, highlighting the persistent nature of economic inequality in the country.
For Palestinian citizens of Israel, this news will be greeted as another example of the discrimination they have faced since the establishment of the apartheid state. The systematic barriers facing them in Israel’s labour market have created persistent economic disparities. Palestinian citizens face challenges in accessing employment opportunities, with studies showing discrimination in hiring practices – particularly when job applications contain Arab names.
The OECD has documented that Palestinian citizens have lower labour force participation rates compared to Jewish citizens, especially among women. Limited access to industrial zones, technology hubs and business centres – which are predominantly located in Jewish areas – further restrict economic opportunities. Additionally, Palestinian citizens often face obstacles in obtaining security clearances required for certain positions in the technology and defence sectors, which are major employers in Israel’s economy.
Poverty rates among Palestinian citizens remain disproportionately high due to various forms of economic exclusion.
According to Israel’s National Insurance Institute, Palestinian families are three times more likely to live in poverty compared to Jewish families.
This disparity is linked to multiple factors, including lower average wages when Palestinians do secure employment.
Palestinian communities receive significantly less state funding for economic development, with non-Jewish local authorities having access to roughly half the resources per resident compared to Jewish local authorities. The lack of public transportation infrastructure in Palestinian towns and limited industrial zones creates additional barriers to employment. These combined factors have led to generational poverty in many Palestinian communities, with children growing up in economically disadvantaged households facing reduced opportunities for social mobility.