Israelis Grow Richer on Average as Income Inequality Rises Slightly

Israel’s average household income grew significantly faster than expenditure in 2018, leaving the average Israeli with more disposable income, according to a report published by Israel’s Central Bureau of Statistics (CBS) on Tuesday.

However, inequality also increased slightly in 2018, after a three-year-long decline. The Gini income inequality index rose from 0.351 in 2017 to 0.355 in 2018. In 2014, Israel’s Gini index stood at 0.370.

The Gini index is a statistical measure that represents the income or wealth distribution of a nation’s residents and is the most commonly used measurement of inequality. The more equal a society is, the lower the Gini index will be.

The average gross household monthly income reached NIS 21,063 in 2018, an increase of 4.3% compared to the previous year, while the total consumption expenditure amounted to NIS 16,475 per month, an increase of only 0.5% compared to the previous year.

The report found that the highest-earning 10% of the population in Israel earned, on average, 8.4 times more than the lowest-earning 10%, while monthly expenditure among Israel’s highest-earning 10% was only 2.4 times that of the lowest-earning 10%.

The highest-earning 10% of the population, which had NIS 40,254 or more in net monthly income, increased their share of the total net income from 22.2% in 2017 to 23% in 2018.

The next highest-earning 10% of the population averaged at NIS 25,671 in monthly net income, while the lowest-earning 10% of the population’s monthly net income averaged only NIS 4,786.

The largest expenditure item for Israeli households was housing, which accounted for 24.8% of total spending. Transportation and communications came in second with 20.4%, and 17.2% of Israelis monthly expenditure was spent on food.

The report found that household spending on health increased by 5.3% in 2018, and spending on food rose by 2.9%. Household spending on clothing and footwear decreased by 4.9%, and education, culture, and entertainment accounted for 4.4% less of household spending compared to the previous year.