Spotlighting Israel’s internal root (shoresh) existential challenges

Israel's leading policy makers personally present Shoresh Institution findings

Prime Minister Yair Lapid
Prime Minister Yair Lapid

Prime Minister Yair Lapid is very familiar with the Shoresh Institution’s policy research. In advance of the September 2019 elections, Lapid met with Shoresh president, Prof. Dan Ben-David to receive an update of Shoresh’s most recent findings on Israel’s primary long-term socioeconomic challenges. He subsequently produced a TED Talk style video entitled “A look at the Future” (מבט לעתיד), based almost exclusively on Shoresh Institution findings and graphs.

Alternate Prime Minister Naftali Bennett
Alternate Prime Minister Naftali Bennett

In 2015, Shoresh Institution researchers, Prof. Dan Ben-David, Prof. Ayal Kimhi and Dr. Noam Gruber, met with Education Minister Naftali Bennett and presented him with an overview of Israel’s education system and its socioeconomic impact. During the meeting, Bennett decided to personally present – to parents, teachers and principals – some of the Shoresh findings highlighting the strong relationship between the level of high school mathematics and the future wages. The video was then widely circulated on social media by Bennett and the Ministry of Education as part of their successful campaign encouraging more pupils to study mathematics at their highest level of aptitude.

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Gender wage gaps in Israel moving in opposite direction than in developed world

Israel’s gender wage gap is substantially larger than the OECD average, and it has been trending upward over the past decade. This study finds that the gender gap in monthly wages of employees at the outset of their careers, a stage when people are also forming and expanding their families, reaches 33%. The lion’s share of this disparity can be attributed to family attributes. Marriage and the birth of children greatly widen the gender wage gap, as they reinforce the tendency toward specialization within the household, with the mother taking more responsibility of housework and most of the breadwinning burden falling on the father. Consequently, women tend to choose employment that is less remunerative but more conducive to integrating career and family life – a choice that may also impact earlier decisions on fields of study in school, which then limit career options downstream.

A relatively small share of the disparity, 4.5 percentage points, can be explained by gender differences in fields of study and employment sectors. Although the issue is not one of lower abilities among girls, female pupils study math and science – fields that lead to relatively higher-wage employment – at lower levels in upper secondary schools than their male counterparts, which reduces their subsequent likelihood to study these subjects at the academic level. Women are more likely to be employed in the service industries than in the manufacturing and infrastructure industries, where wages are higher.

To the extent that women’s choice of study subjects arises from normative biases transmitted to them by their parents, teachers, and society at large, it is important that this issue be understood and rectified. Girls should be encouraged to study math and science at higher levels, both in secondary school and in higher education. This needs to be supplemented by a major improvement in Israel’s early childhood education system – first and foremost for the children, but also in terms of availability and cost for mothers wanting to work more hours. It is also recommended that paternity leave be instituted, and that tax benefits and the “work grant” (also commonly known as the negative income tax) for young mothers be increased.

Price gaps between Israel and the OECD have not risen by nearly as much as OECD calculations indicate

One topic that continues to stay at the forefront of the public discourse in Israel is the issue of high prices. What gets submerged in this discourse is (1) to whom and (2) to what is the price of a given good compared. Three approaches are outlined here. The OECD method compares the price of a good in an individual country to its average price in the OECD countries – but it is based on exchange rates, which distort the picture of relative prices among countries and bias the OECD comparisons. Given the difficulty in accurately determining actual price gaps between individual countries and averages of country groupings, such as the OECD, two alternative measures are detailed here. The first calculates the gap between the price of a specific consumption category and the overall price level in each country and then compares this gap to the average gap in the OECD to ascertain if the price is extraordinarily high or low vis-à-vis other domestic prices in comparison with the OECD average. The second alternative relates prices to wages and compares the number of goods that can be bought with the median wage in each country to the OECD average. Though none of these methods is free of drawbacks, they all nonetheless point to a number of consumption categories where Israeli prices appear to be exceptionally high and policy attention is needed.


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Watch Shoresh president Prof. Dan Ben-David speak at an unconventional venue

(English version, Hebrew version)

Israel’s political establishment has been leading the country straight towards the iceberg for decades. The economic fallout from the Covid-19 pandemic and the ongoing neglect of the healthcare system are just the tip of the iceberg. Decaying education and transportation infrastructures, for example, choke the labor productivity – GDP per hour worked, already among the lowest in the industrial world – that determines Israeli wages. In fact, productivity gaps between the leading developed countries and Israel have risen more than three-fold since the 1970s. When roughly half of the country’s children, who tend to belong to Israel’s fastest growing population segments, receive a third world education, then the nation’s ability to maintain a first world economy – which is a necessary condition for physically surviving in the planet’s most dangerous region – begins to seriously threaten Israel’s future existence.

Given on the Jerusalem street across from the prime minister’s residence at the invitation of protest organizers, the talk was made with a clear understanding that the presentation would be a professional and evidence-based analysis of the kind that Shoresh provides senior government ministers and opposition leaders alike. Its focus was on the internal changes that Israel has undergone, their magnitude, their impact, and on the need for significant changes in the country’s national priorities while the window of opportunity is still open.

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