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12 - Income Inequality in Israel: A Distinctive Evolution

from Part III - Investment in Human Capital, Productivity, and Inequality

Published online by Cambridge University Press:  04 February 2021

By
Momi Dahan
Edited by
Avi Ben-Bassat ,
Reuben Gronau  and
Asaf Zussman
Avi Ben-Bassat
Affiliation:
Hebrew University of Jerusalem
Reuben Gronau
Affiliation:
Hebrew University of Jerusalem
Asaf Zussman
Affiliation:
Hebrew University of Jerusalem
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Summary

The level of disposable income inequality in Israel has increased noticeably since the mid-1980s, and today it is above most developed countries. In contrast, market income inequality, which hit a record level in 2002, has reversed its course since then and has shown a sharp decline in subsequent years, and it is now below the OECD average. This chapter offers tentative explanations for the inverted U-shape evolution of market income inequality in Israel in the last twenty-five years, which is distinctive in view of most developed countries℉ experience. In addition, this chapter addresses the unique combination of income inequality in Israel which has one of the highest levels of disposable income inequality but is ranked below the OECD average measure of market income inequality.

Keywords

Income Inequalityredistribution policyunemploymenttaxessocial securitylabor market institutionsSBTC
Type
Chapter
Information
The Israeli Economy, 1995–2017
Light and Shadow in a Market Economy
 , pp. 362 - 396
Publisher: Cambridge University Press
Print publication year: 2021

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