On the way to being poor, at the mercy of the government, according to an official report by the Ministry of Finance (the subjects have no connection to the content of the article) (Photo: ShutterStock)
While Finance Minister Bezalel Smotrich devotes most of his time to training in the state budget the coalition funds totaling NIS 12.5 billion, which will be distributed to the religious and ultra-Orthodox parties, of which NIS 3.7 billion will go to ultra-Orthodox yeshivas, the Ministry of Finance's Chief Economist's Department publishes a report that can only be called "amazing."
The report states emphatically that the government, through the coalition grants that will be given as an increased allowance to Avrachim and institutions that are not responsible for core studies, effectively condemns them to a life of poverty and reduces their future earning chances in the labor market.
The severe report, published by the Ministry of Finance Chief Economist Shira Greenberg, who will soon leave her position, effectively reverses the claim of politicians in the ultra-Orthodox sector who present increasing yeshiva budgets as an achievement for their constituents.
"Government decisions emerging at this time regarding increasing the informal education budget, increasing child allowances, and implementing assistance programs such as providing food stamps – without tests to exhaust earning capacity – are expected to lead to a decline in Haredi men's earning potential and the extent to which they integrate into the labor market, thereby harming long-term growth," the report states.
Yeshiva students. The grants will maintain poverty among the ultra-Orthodox (Photo: ShutterStock)
Report Highlights
According to the report published by the Ministry of Finance:
As of 2022, there are significant gaps in employment and wages between population groups of prime working age. Particularly striking are the employment and wage gaps between Haredi men relative to non-Haredi Jews (the employment rate of Haredim is about 34 percentage points lower and the wage gap stands at about 47%); and of Arab Israeli women relative to non-Haredi Jewish women (the employment rate of Arab Israeli women is about 43 percentage points lower and the wage gap stands at about 39%).
The degree to which Haredim and Arabs integrate into the labor market has significant implications for the growth and performance of the Israeli economy in the coming decades, and therefore it is very important to understand the expected trends in the development of employment and wages of the various population groups.
In the present study, we examine the development of education levels among young adults (ages 25-34) in various population groups over the past 9 years (2014-2022). This examination can provide an indication of the employment rates and expected future earning capacity of the groups; Previous studies have found that in all population groups there is a significant positive correlation between education levels and their employment and wage rates.
Narrowing the gaps in education relevant to the labor market among Haredi men lies in increasing core studies in the education system from its early stages, which is expected to enable better integration into the higher education system as well. Beyond that, there is a significant component of choosing Torah studies over work, as well as of financial incentives directed to Avrachim who support it.
Government decisions emerging at this time regarding an increase in the non-official education budget (which is expected to lead to the diversion of students to institutions that teach core studies at lower levels, or that do not teach core curriculum at all, throughout all stages of study, are expected to continue to deepen the decline in the education levels of Haredi men), increase child allowances, and implement assistance programs such as providing food stamps – without tests to exhaust earning capacity. These are expected to lead to a decline in Haredi men's earning potential and the extent to which they integrate into the labor market, thereby harming long-term growth.
Implicitly, the Chief Economist's Department also adds a comment that can be understood on the subject of gender segregation in the workplace:
It should be noted that various measures to expand education levels and increase labor market participation among the various population groups will not lead to the exclusion of women from the labor market or their displacement from educational institutions, with the sharp increase in women's employment rates over the past two decades being the main factor in narrowing employment gaps relative to OECD countries.
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Chief Economist at the Ministry of Finance, Shira Greenberg. A report that is nothing short of amazing (Photo: Finance Ministry Spokesperson's Office)
The report also relates to other sectors:
as of 2022, it is evident that there are significant gaps in education levels between young adults in the various population
groups.- The relatively high level of education among Haredi and non-Haredi Jewish women stands out positively. The share of young women with post-secondary education or higher (including female students) among Haredi and non-Haredi Jewish women stood at 2022% and 74% respectively in 71.
On the other hand, the relatively low level of education of young Arab Israeli women, young Arab Israelis, and especially Haredi young adults stands out.
Thus, the share of post-secondary education (including female students) among Arab Israeli women stood at 2022% in 42, among Arab Israeli men it was 26%, and among Haredi men it was only 14%. The mirror image of this is the relatively high rates of those who do not have a matriculation certificate. Almost 80% of young Haredim do not hold a matriculation certificate (or higher).
Over the past 9 years, there has been an increase in the education levels of young Arab Israeli women, especially Haredi women, such that the education gaps between them and non-Haredi Jewish women have narrowed, while among Haredi and Arab Israeli youth there has been a decline in education levels, leading to widening gaps compared to non-Haredi Jews.
This trend, to the extent that it continues, is expected to lead to a narrowing of the existing employment and wage gaps among Haredi and Arab Israeli women relative to non-Haredi Jewish women. But in contrast to widening the gaps between Haredim and Arabs relative to non-Haredi Jewish men.
The main potential for narrowing gaps among Arab Israeli men lies in strengthening the education system at the high school level, which will also enable them to increase their access to the higher education system and then integrate into professions with high productivity.
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