Israeli Households See Reduced Income Inequality Amidst War

Real income from labor in Israel decreased in 2024, a decline offset by a significant increase in social welfare payments, according to a new survey by the Central Bureau of Statistics (CBS) on household income and expenses. The Gini coefficient, measuring societal stratification, fell from 0.349 to 0.333, indicating a reduction in social inequality. While the average nominal income from work rose slightly to 20,803 shekels per month, inflation caused a real decrease of about 1.4%. Concurrently, social welfare payments and subsidies surged by approximately 15% in real terms, reaching 4,022 shekels monthly and comprising 14.8% of total household income, up from 12.9% in the previous year. These shifts reflect both economic trends and the ongoing war's impact. Overall gross household income remained largely unchanged at 27,173 shekels, but net income grew by 1.3% in real terms to 22,555 shekels, partly due to a reduction in mandatory payments. Consumer spending saw a minimal real increase of 0.3% to 18,695 shekels, meaning average households consumed about 1% less in real terms than in 2022. The income gap between the highest and lowest earners narrowed to 6.8 times, though it remains high compared to OECD countries. Notably, the share of government assistance in the income of the top decile increased, while it slightly decreased for the bottom decile, with the top decile receiving nearly double the absolute amount of benefits as the bottom decile.