Socioeconomic mobility between generations is relatively low in Israel — study

Israel Democracy Institute research finds that only 14% of Israeli children in lowest income category climb to the top, with large differences between population groups

Luke Tress is an editor and a reporter in New York for The Times of Israel.

Jerusalem, August 4, 2021. (Yonatan Sindel/Flash90)
Jerusalem, August 4, 2021. (Yonatan Sindel/Flash90)

Israel has a relatively low rate of intergenerational mobility, meaning it’s generally uncommon for children born into lower income categories to climb up the socioeconomic ladder, according to a new study.

Only 14% of children born into Israel’s lowest income quartile climb to the top quartile, with even lower rates for ultra-Orthodox and Arab Israelis, the study found. The overall rate is slightly lower than the OECD average of 17%.

The study by the Israel Democracy Institute said that 36% of children born into the bottom income quartile will remain there, compared with 31% in other OECD countries.

The correlation between children’s income and parental income is 0.28, on a scale of 0 to 1. The figure is in line with the US, and higher than developed countries including Canada, Sweden and Denmark, the study’s authors said.

Overall, income gaps between different groups were decreasing, with disparities being “reduced across generations among most population groups and especially between Jews and Arabs, and by non-Haredi Jews.”

“On the other hand, upward mobility among Arabs is relatively moderate, and there is a decrease in the ultra-Orthodox population,” the researchers said in a statement.

The researchers studied intergenerational mobility in employment and income for Israelis born in the late 1970s and early 1980s. The study compared the cohort’s income at adulthood at the ages of 31-36 with their parents’ income when the parents were in their mid to late 40s on average.

Non-ultra-Orthodox Jews had the highest chance of moving from the lowest income quartile to the highest — 18%. Ultra-Orthodox had the lowest rate, at 6%, Muslims were slightly better at 7% and Christians were at 11%.

Half of the ultra-Orthodox and nearly half of Muslims — 47% — who were born into the bottom quartile remained at the same level.

Ultra-Orthodox Jews had the lowest correlation between parental income and children’s income, at 0.13 — but that was mostly due to downward mobility, as many children in high-income families chose Torah studies over fields that were more relevant to the labor market, moving them down the income scale.

Overall mobility for the ultra-Orthodox appeared to be declining, and there was no improvement between the parents’ and children’s generations.

The study said that Muslim women were caught in a “severe poverty trap.”

“Around two-thirds of women born to parents in the lowest income quartile remain in that quartile (compared with just over one-third of Muslim men),” the authors wrote.

Other groups fared better, with the descendants of immigrants from the former Soviet Union seeing significant improvements.

Overall, the researchers found a “regression to the mean” in population groups, meaning if the parent’s generation was below the overall population’s average income, their children’s income would be higher, and closer to the national average.

Income gaps between the population groups decreased between the generations in the study.

Children’s socioeconomic status is linked to their parents’ status by factors including their living environment, social sphere, educational investment and social connections. Education was the key way that parents transferred their earning ability to their children, the study said.

“The upward mobility among some of the groups points to the potential that education has in creating equal opportunities, and in creating upward mobility of populations from weak economic backgrounds,” the authors said.

The study was carried out by researchers Prof. Karnit Flug, William Davidson, Gabriel Gordon and Roe Kenneth Portal. It will be presented at the Eli Hurvitz Conference on Economy and Society in Jerusalem later this month.

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