Arab Education Gaps Threaten Israel's Economic Future, Study Warns

A new Israeli research report highlights significant disparities in education and economic productivity, warning of their impact on Israel's future economy. The study, published by the Shoresh Institution for Economic and Social Research, indicates that advanced production sectors rely on a limited segment of the population, while broad student groups, particularly Arab students, show low academic achievement. Arab students constitute about a quarter of first-graders in Israel.

The "Shoresh Index 2026: Israel's Socio-Economic Threat" report, authored by Professor Dan Ben-David, reveals that Arab students' performance on the 2025 PISA international assessment fell below that of all OECD countries and most participating Arab nations. Ben-David cautioned that widening educational gaps, combined with demographic shifts and declining productivity, jeopardize Israel's standing among developed economies. He stressed that addressing these gaps is no longer a concern for specific population groups but a national imperative.

Data shows Arab students made up 23% of first-graders in 2026, making their educational level a critical factor for the entire economy's future as they enter the workforce. Ben-David emphasized that the future workforce is currently in schools, and the quality of education for Arab students directly impacts Israel's ability to maintain its developed status. He argued that reducing these gaps benefits both the Arab community and the entire nation.

The study also noted a long-term decline in Israel's economic standing compared to G7 nations. While Israel's productivity surpassed the G7 average by 9% in 1975, it fell 15% below the average by 2023. High-tech productivity in 2024 was 22% above the OECD average, while productivity for the remaining 90% of workers was 24% below it. This disparity, along with the concentration of high-skilled workers in fields like tech and medicine (3% of the population), indicates a narrow base supporting key economic sectors.

Educational gaps are not exclusive to the Arab community. The PISA 2025 results showed that 76% of OECD countries outperformed Israeli students in formal religious education, and 81% outperformed students in formal education overall. Many Haredi boys do not study core curriculum subjects and do not participate in these assessments, meaning their results are not reflected in international comparisons. The institute links these educational disparities to Israel's ability to expand its human capital, warning that continued gaps will limit future productivity and living standards.

The report also addressed the emigration of skilled Israelis. The proportion of Israeli doctors residing in OECD countries (excluding the US) rose from 0.7% in 2000 to 1.9% in 2023. In 2024, departures from Israel exceeded returns by approximately 160%. Ben-David warned that a shrinking human capital base and increasing burdens on remaining skilled workers could exacerbate this trend, straining the economy long-term.

Ahead of upcoming Knesset elections, the study proposes recommendations for the next government, including an updated, unified, and mandatory core curriculum, a reprioritization of the national budget towards national priorities over sectoral interests, and reforms to governance for better oversight and effectiveness. Ben-David concluded that Israel's economic future hinges on its ability to provide education that enables broader segments of the population to participate in the modern economy, rather than relying on a limited pool of highly skilled individuals.