Adva Center Report Reveals Growing Income Inequality and Public Service Decline in Israel

A new report by the Adva Center, published on July 12, 2026, highlights widening economic disparities and deteriorating public services in Israel three years after the outbreak of the Iron Swords war. The report shows that the middle class is shrinking, with only 54.4% of households classified as middle class compared to the OECD average of 62%. The top income decile earns on average 85,218 shekels per month, 13.6 times more than the bottom decile's 6,278 shekels. Wealth concentration is stark, with 82% of capital income held by the richest decile and 58% by the top percentile alone.

The report attributes these trends to long-term government priorities favoring privatization, austerity, and disproportionate spending on settlements and security infrastructure rather than social services. Public spending on civilian services is only two-thirds of the OECD average, while the war has cost over 400 billion shekels. Health and education systems are under severe strain: the healthcare budget is 26 billion shekels below real needs, mental health services face a shortage of nearly 2,700 professionals, and early childhood education suffers from low funding and staff shortages, leading to the closure of 518 daycare centers in 2024.

Labor market data reveal that nearly a quarter of full-time workers earn low wages, with significant ethnic and gender wage gaps. Arab women earn the lowest average salaries at 6,975 shekels per month. Housing inequality is also pronounced; only 41% of the lowest income decile own homes compared to 93% in the top decile, with renters in the bottom decile spending 54% of their net income on housing costs.

The report also addresses the plight of approximately 143,000 citizens displaced from their homes, many pressured to return under economic coercion without adequate long-term rehabilitation plans. Adva Center researchers reject claims that the report is politically motivated, emphasizing its basis on official data and their transparent social agenda to reduce inequality and strengthen public services.