Top 10% Earn 7.3 Times More Than Bottom 10% in Israel
Translated & summarized from Mako by baba
Israel's top 10% income earners make 7.3 times more than the bottom 10%, with the lowest two deciles spending more than they earn. The 2023 Household Expenditure Survey revealed a net monthly income of about 46,500 shekels for the top decile and a deficit for the lowest. Income deciles are now calculated per standard person, and the top 10% hold 22.1% of total net income.
The story in 5 lines · by baba
- Israel's top 10% income bracket earns 7.3 times more than the bottom 10%.
- The two lowest income deciles spend more than they earn, facing monthly deficits.
- The top 10% of households hold 22.1% of Israel's total net income.
- Housing is the largest expenditure for Israeli households, at 25.3% of consumption.
- Homeownership is significantly higher in the top income decile compared to the bottom.
The top 10% income bracket in Israel earns 7.3 times more than the bottom 10%, according to the 2023 Household Expenditure Survey. Households in the two lowest income deciles spend more than they earn, with the bottom decile facing a monthly deficit of approximately 4,260 shekels, and the second decile a deficit of about 1,100 shekels. In contrast, the top decile has a net monthly income of around 46,500 shekels and spends about 21,800 shekels, leaving a surplus of more than double their expenses. This surplus funds savings, investments, and loan repayments.
The survey's methodology for income collection was updated, incorporating data from the Tax Authority and National Insurance for the first time, which led to a significant jump in reported average gross income to 26,330 shekels and net income to 21,606 shekels per household. This makes direct comparison with previous years, which relied solely on self-reporting, limited.
Income deciles are calculated based on net income per standard person, not per household. This system accounts for economies of scale, meaning additional household members contribute less to expenses than the first. For instance, a child counts as less than a full person in the calculation. This method can place a childless couple earning 20,000 shekels net higher on the scale than a family of five earning 30,000 shekels net.
For households headed by an employee, the bottom decile ends at 3,158 shekels net per standard person, the fifth at 7,912 shekels, and the top decile begins above 15,869 shekels. The top 10% of households hold 22.1% of the total net income, while the bottom 10% hold only 2.6%. The bottom five deciles combined account for about 27.5% of the income, less than the top two deciles (9th and 10th) which together hold approximately 38%.
Housing is the largest expenditure, at 25.3% of consumption, followed by transportation and communication (18.6%) and food (17.9%). Homeownership is significantly higher in the top decile (85.9%) compared to the bottom decile (37.6%).
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