The Taub Center is publishing this year’s A Picture of the Nation 2026, which presents updated data on the state of Israeli society. The booklet includes selected findings from studies conducted at the Center over the past year, including key findings on the economic and social costs borne by Israel as the country enters its third consecutive year of war.
The booklet addresses topics from across the Taub Center’s research fields: economics, the labor market, artificial intelligence, demography, welfare, health, environment and health, education, and early childhood. The following is a selection of findings from the booklet. To read the full publication, click here.
The booklet was written and edited by Prof. Avi Weiss, President of the Taub Center and Professor of Economics at Bar-Ilan University.
Operation Roaring Lion
This chapter presents data on several aspects of the operation, including hospitalizations, the number of sirens activated daily, and the number of evacuees, comparing them with the previous round of fighting with Iran and the October 7 War.
During the first week of the operations against Iran, credit card spending fell by 20%
In both operations against Iran, credit card spending contracted by about 20% in the first week. In both instances, as the campaign continued, spending increased and returned to the average level recorded in the two months preceding the operation.
Total credit card spending in March 2026 — during Operation Roaring Lion — was higher than in February 2026 and March 2025. However, average daily spending during Operation Roaring Lion was about 11% higher than the daily average during Operation Rising Lion in June 2025.
Macroeconomic Trends
A massive increase in defense expenditures, both now and in coming years
Annual defense expenditures (in 2020 prices) grew between 1995 and 2019 at an average rate of 1.7% per year. However, because GDP grew over the same period at an average annual rate of
3.7%, defense expenditures as a percentage of GDP declined from about 8% in the mid-1990s to about 5% in the years preceding the war. The large war-related expenditures of recent years have raised defense spending to about 9% of GDP — the highest level in the past 30 years.
Defense expenditures may remain at about 8%–9% of GDP in 2026 as well. Under the Nagel Committee framework, these expenditures are expected to decline to about 4% of GDP within a decade. However, estimates regarding the continuing conflict with Iran suggest that a more moderate decline should be expected, to about 5%–6% of GDP within a decade.
Labor productivity in Israel is low relative to similar high-income countries, and the gap is widening. One explanation is Israel’s low level of human capital
The OECD Survey of Adult Skills (PIAAC) assesses adults’ basic skills in each country in literacy and numeracy. Although Israel is one of the most educated countries in the world, in the 2022–2023 survey, the average skill level in Israel was about 0.3 standard deviations below the OECD average. The gap is especially pronounced in the Arab population, where the gap reaches a full standard deviation.
Substantial gaps also exist between the Haredi population — particularly Haredi men — and the rest of the Jewish population. Even more concerning is that the gaps between population groups have widened since the previous Survey of Adult Skills, conducted in 2014.
The low skill levels in the Arab population and among Haredi men stem largely from gaps in the quantity and quality of education, including vocational training — an area in which Israel fares particularly poorly compared with other high-income countries.
Labor Markets
Widening wage gaps between high-tech manufacturing workers and high-tech services workers
For many years, wages among workers in high-tech manufacturing, represented by the manufacture of computers and optical equipment, were slightly lower than wages among workers in high-tech services, represented by the programming industry. Recently, the wage gaps between the two groups have widened.
Wage gaps between high-tech workers as a whole and other workers in the economy have been widening steadily. In 2012, high-tech workers earned, on average, 2.2 times the average wage in the rest of the economy; by 2025, this figure had risen to almost 3 times as much. This gap reflects the large differences in labor productivity between the two groups.
It should be noted that in recent years, the number of high-tech jobs has stagnated, following steady growth in 2014–2023.
An increase in employment among Arab women, stagnation among Haredi men
After a sharp decline in the employment rate of Arab men at the beginning of the war, the rate rose and stabilized at 77% in early 2025 — slightly below the peak of 79% recorded in 2023. By contrast, among Haredi men, employment rose slightly at the beginning of the war, but in 2025 it fell to a level below that recorded in 2023. Non-Haredi Jewish men maintained a high employment rate of about 87%.
Among non-Haredi Jewish women, the high employment rate of the past two years was maintained, while among Haredi women it continued to rise, almost closing the gap over the past year. The rate among Arab women also continued to rise, reaching 49% in the first half of 2025; it has remained stable since then.
If these trends continue, the employment rate of Arab women is expected to surpass that of Haredi men, and may even reach the government employment target of 53% by 2030 ahead of schedule.
Artificial Intelligence
About one-third of Claude use: programming, education, writing, and content editing
The graph shows the distribution of selected uses of Claude in Israel at the beginning of 2026. Nearly one-quarter of the use of this tool is for programming and writing code, and about one-sixth is for creating or editing content, whether written or visual, and for education and training purposes. About 1.4% of use is for employment assistance, such as career guidance or writing resumes. About half of uses were not classified.
According to data from Anthropic, Israel ranks second in the world in Claude use per capita. The main uses in Israel are similar to the global average. However, there are some areas in which Israeli users stand out, such as translation, medical consultation, and the creation of religious or spiritual content. Although these uses account for a small share of total use in Israel, they are still notable in international comparison.
The share of employers reporting a decline in demand for workers due to the use of artificial intelligence is growing
In the CBS Business Tendency Survey from March 2026, employers of 8% of workers in the economy reported a decline in demand for workers due to the use of artificial intelligence. The main impact is in the high-tech and finance industries, where a reduction in staffing levels was reported by employers of about 12% of workers, compared with about 7% in the rest of the economy.
These figures reflect an increase from the previous survey, conducted in June 2025, in which employers of about 5.5% of high-tech workers and 2.5% of workers in the rest of the economy reported a decline in demand for workers. An increase in demand for workers in high-tech industries due to the adoption of the technology was reported by employers of almost 6% of workers — a sharp rise from the previous survey, when the figure was less than half a percent.
Across the economy as a whole, the decline in demand shifted from workers with high levels of education/skill to workers with low levels of education/skill.
Demography
More Israelis are leaving the country, and fewer are returning
Migration to and from Israel has always been the least stable of the three components driving demographic change, and in recent years this component has become even less stable.
Emigration among native-born Israelis, both Jews and non-Jews, has been on a steady upward trend since 2022. Over the past three years, emigration rates have risen far above any level recorded in the preceding decade. At the same time, the number of returning residents who were born in Israel was low compared with the previous decade. Compared with the average for 2014–2022, there was also a dramatic increase in emigration among Jews and non-Jews born in other countries. Finally, despite rising antisemitism, the number of immigrants in 2025 — which rose sharply in 2022 and 2023 following the Russia-Ukraine war — was the lowest since 2014, except for 2020, when strict movement restrictions were imposed due to the COVID pandemic.
The crude emigration rate among the non-Jewish population, most of whom were born abroad, is particularly high: in 2023, it stood at 391 emigrants per 10,000 residents, compared with 16 in the Arab population and 48 in the Jewish population. The combination of trends in immigration and emigration has left Israel with a negative migration balance for two consecutive years.
In 2023, the share of native-born Israelis living abroad was smaller than in 1990
In a sample of 42 countries, it was found that between 1990 and 2023, most countries experienced an overall increase in the share of people who had emigrated from their countries of birth. Particularly sharp increases were recorded in Eastern European countries and in small countries such as Luxembourg, Iceland, and New Zealand.
Israel is one of only four countries in this sample — alongside Finland, Slovenia, and Cyprus — that experienced a substantial decline in the share of native-born residents now living elsewhere. In fact, among these four countries, Israel recorded the sharpest decline: from 8.3% of all those born in the country living outside its borders in 1990 to just 4.3% in 2023.
Welfare
The shortage of social workers and the burden placed on them increase with the poverty level in the locality
Currently, about 18% of social worker positions in local authorities are unfilled, amounting to a shortage of 1,328 professionals. The share of unfilled positions has fluctuated considerably over the years, but the overall trend points to a steadily growing shortage.
The difficulty in filling positions is more severe in localities where social distress is greatest: the share of unfilled positions in local authorities with high poverty rates — where more than 25% of families have income below the poverty line — is much higher than in localities with low poverty rates, where up to 15% of families are below the poverty line. By sector, in Jewish localities, excluding Haredi localities, the average share of unfilled positions stood at about 17% in April 2026, while in Arab localities, and particularly Bedouin localities, it was much higher, at 21% and 26%, respectively.
The number of service recipients per social worker is also higher in the poorest localities than in localities with medium and low poverty levels. This has a decisive effect both on the level of care that can be provided to service recipients and on the burnout of professionals.
Midlife and Single
People aged 50–64 who live alone are poorer than their peers who do not live alone
Among individuals in midlife — and also at older ages — the share of households with income below the poverty line is higher among those living alone than among those who do not live alone. Additional data show that about 16% of the income of people aged 50–65 who live alone comes from benefit payments, compared with about 6% among those who do not live alone. They are also less likely to live in a home they own: about 59% among individuals, compared with 83% among those who are not single. Their social and emotional situation is also worse, and they experience loneliness at four times the rate of those who do not live alone.
Health
An increase in the number of physicians who studied medicine in Israel
The number of new licenses to practice medicine continues to rise, including licenses granted to graduates who studied medicine in Israel. In 2023, their number stood at 750, compared with 672 in 2022.
In recent years, the number of students beginning medical studies at universities in Israel has gradually increased, from 731 new students in 2018 to about 1,400 in 2025. The Ministry of Health aims to reach 1,700 new students in 2030.
This increase is the result of several processes implemented in Israel in recent years, including expanding the number of students in medical schools in Israel and converting training programs intended for foreign students into programs for Israeli students.
The measles outbreak in Israel: a troubling warning bell
The measles outbreak that began in April 2025 is continuing to intensify. The number of cases in Israel per 100,000 population is 55 times higher than in the US and 19 times higher than in Europe. The case fatality rate is almost 4 times higher than in the US and nearly 5 times higher than in Europe.
The reported data in Israel – about 3,600 cases as of the beginning of June 2026 – are most likely only the tip of the iceberg. Statistical models estimate that morbidity is actually 3 to 4 times higher, with the true number of cases between 10,000 and 14,000. The gap between the number of reported cases and the actual number stems from underreporting in isolated communities and from cases that do not reach formal diagnosis.
Although Israel’s vaccination rate is slightly higher than that in the US and Europe – 95%, compared with about 93% and 94%, respectively – the average rate in the large Haredi towns – Jerusalem, Beit Shemesh, Bnei Brak, Beitar Illit, Nof HaGalil, and Safed – is only 84%.
Environment & Health
Most environmental expenditure is directed toward waste management
Government expenditures on environmental protection include spending on waste treatment, nature conservation, including biodiversity preservation, reducing air and water pollution, and mitigating climate change and its effects.
In 2024, public expenditure on environmental protection in Israel totaled about NIS 11 billion, in 2024 prices, with local authorities financing 87% of this amount. Most of the expenditure is directed toward waste management, and local authorities finance 92% of this component. In 2024, waste treatment accounted for 83% of total government expenditure on environmental protection, while wastewater treatment accounted for 8.4%. Expenditure on air pollution prevention is especially low, despite the high mortality rates in Israel attributed to this factor.
Looking over time, in 2024, expenditure on waste treatment was 54% higher than in 2013, although the population grew by only 25% over the same period. Most of the increase occurred in the past three years, 2022–2024.
Electricity generation from renewable energy sources falls well short of declared targets
The most recent long-term targets for integrating renewable energy into electricity generation, declared by Israel in 2022, are 20% of electricity generation by 2025 and 30% by 2030. Over the past decade, installed capacity has grown significantly, reaching about 27% of total installed capacity. However, actual generation remains much lower — only about 14%–15% of electricity consumption in 2024.
The share of electricity generated in Israel from renewable sources in 2023 was low compared with countries similar in population size and climate conditions.
Education
One explanation for the absence of a teacher shortage: the recruitment of boundary-crossing teachers
One explanation for the large gap between the projected demand for teachers and the actual number is the sharp increase in the number of “boundary-crossing” teachers in State Hebrew and State-religious education. In State Hebrew education, about 30% of teachers are Arab or graduates of State-religious or Haredi teacher training institutions, while in State-religious education, about 30% of teachers received their training in Haredi seminaries. Overall, this amounts to tens of thousands of teachers working in schools whose orientation differs from that of the institutions in which they were trained.
The data show that employing boundary-crossing teachers has no substantial effect on student achievements, and they can therefore serve as a possible solution to teacher shortages. In addition, integrating them into school teaching staffs may also have an important social dimension: promoting multiculturalism and fostering tolerance and coexistence in the education system.
Early Childhood
School readiness is lower among children whose parents served in the reserves
In a survey conducted by researchers from the Taub Center Initiative on Early Childhood Development and Inequality among parents of young children, participants were asked the extent to which their child was able to perform basic reading and arithmetic tasks upon entering school. Responses were given on a scale reflecting the child’s level of ability: not at all, to a small extent, to a moderate extent, or to a very great extent. These items were combined into an overall school readiness index, reflecting preschool cognitive skills.
The results show that children aged 4–6 with a parent called for reserve duty at the beginning of the October 7 War demonstrated lower school readiness than children with a parent who was not called up. This finding remained even after controlling for a wide range of demographic and family variables, including the child’s age and gender, family income level, parents’ education, family size, family status, and the emotional availability of the parent who remained at home.
Based on the survey results, it appears that a parent’s prolonged absence from home during national emergencies may disrupt young children’s ability to develop the cognitive, social, and emotional skills needed for the transition to school. This is a critical developmental stage, and harm at this stage may have long-term consequences.
Prof. Avi Weiss, President of the Taub Center and author of the booklet, says: “As every year, A Picture of the Nation addresses the major issues facing Israel’s leadership and public. This year, the booklet highlights critical issues such as the growing burden of public debt and defense expenditures, alongside troubling changes in the demographic structure and urgent challenges in health, welfare, and education. The data presented in the booklet can help decision makers formulate informed and beneficial policy that takes into account both ongoing needs and the needs of the hour.”
The Taub Center for Social Policy Studies in Israel is an independent, non-partisan socioeconomic research institute. The Center provides decision makers and the public with research and findings on some of the most critical issues facing Israel in the areas of education, health, welfare, labor markets and economic policy in order to impact the decision-making process in Israel and to advance the well-being of all Israelis.
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