Male Income, Female Income, and Household Income Inequality in Israel: A Decomposition Analysis

Decomposing inequality by income determinants, we find that uniform increases in education reduce income inequality, with increases in female education having a larger effect than increases in male education. In addition, an increase in the fraction of ethnic minorities in the population has a positive effect on inequality, but this operates mostly through female income. All this suggests that female income is the most adequate target for inequality-reducing policy, and that within-household gender equality is good for reducing income inequality among Israeli households.