Israel's Income Gap: Top 10% Earn 7.3 Times More Than Bottom 10%
Translated & summarized from Bizportal by baba
Israel's top 10% of earners have a net monthly income 7.3 times higher than the bottom 10%, according to 2023 data. The lowest decile faces a monthly deficit, while the highest decile has a significant surplus. A new data collection method for income in 2023, using tax and insurance records, increased reported incomes. Housing remains the largest household expense, and the top decile holds over 22% of total net income.
The story in 6 lines · by baba
- Israel's top 10% earn 7.3 times more net income than the bottom 10% based on 2023 data.
- The bottom two income deciles spend more than they earn, facing monthly deficits.
- The top decile's net monthly income is approximately NIS 46,500, with expenses around NIS 21,800.
- A 2023 survey change incorporated tax data, increasing reported household incomes.
- Housing constitutes the largest household expenditure category at 25.3% of consumption.
- The top 10% of households account for 22.1% of total net income in Israel.
A new report based on 2023 household expenditure data reveals a significant income disparity in Israel, with the top 10% of earners bringing in 7.3 times more net income than the bottom 10%. The average net monthly income for households in the bottom decile is approximately NIS 6,360, while their expenses average around NIS 10,600, resulting in a monthly deficit. In contrast, the top decile enjoys a net monthly income of about NIS 46,500, with expenses averaging NIS 21,800, leaving them with a substantial surplus.
The report, which utilizes data from the Central Bureau of Statistics, indicates that the two lowest deciles spend more than they earn. The deficit in the first decile is about NIS 4,260 per month, narrowing to approximately NIS 1,100 in the second decile. From the third decile upwards, income consistently exceeds expenses, with the surplus growing significantly as income levels rise. This surplus is the source of savings, investments, and loan repayments for households.
A methodological change in data collection for the 2023 survey, incorporating tax and national insurance data for income alongside self-reported expenses, led to a notable increase in reported average income compared to previous surveys. The average gross monthly income per household was reported at NIS 26,330, and net income at NIS 21,606. The average net monthly expenditure, excluding the imputed value of owner-occupied housing, was NIS 14,823, representing about 69% of net income.
The report also details differences in household composition, with the bottom decile averaging 4.2 people and 0.9 earners, while the top decile averages 2.4 people and 1.7 earners. Income sources also differ, with the bottom decile relying on about 38% from benefits and support, compared to only 5.6% for the top decile, which derives approximately 82% of its income from work. The top decile accounts for 22.1% of all net household income, while the bottom decile accounts for 2.6%. Housing is the largest expense category, at 25.3% of consumption expenditure.
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