The Cost of Social Welfare: Israel in Comparative Perspective

Compared to the five Western European countries included in this research, Israel’s public social expenditure is low, and in most areas except health, it is similar to the United States.  The Israeli government spends relatively little in areas which have the potential for improving the long-term economic well-being of citizens: active labor market policies, housing and support for families with children.  The retirement income provided by the state through the social security system is much less generous than in Europe, but spending on public employee pensions is high.  The overall magnitude of public social expenditure in Israel fell during the 2000s, at a rate without parallel in the other countries.  Retrenchment has been marked in programs that mainly serve the economically vulnerable.  Private spending on health and pensions is rising, but remains far below the US and some European countries.

This paper appears in the Center’s annual publication State of the Nation Report – Society, Economy and Policy 2011-2012.