Who Benefits the Most? The Unequal Allocation of Transfers in the Israeli Welfare State

Abstract

Objective. This article critically examines contradictions within the Israeli welfare system, and asks how welfare transfers affect poverty for different social groups. Methods. Using data from Israel’s 1996 Income Survey conducted by the Central Bureau of Statistics, the analysis focuses on households with working‐age heads, and compares poverty rates, before and after transfers among three groups: (1) recent immigrants; (2) Arabs; and (3) ultra‐orthodox Jews (Haredim), distinguishing between couple‐ and female‐headed households. Results. The results show that social welfare policy is more effective in aiding recent immigrants, who are entitled to special benefits, than aiding Arabs. The findings also show that transfers have a stronger effect in reducing poverty among female‐headed families than among couple‐headed families, thus reducing the gap between these two types of households. Conclusions. Israeli welfare policy reduces poverty, but this effect differs substantially by social group. While formally Israel is considered a universalistic welfare state, for historical and ideological reasons certain social groups, such as Jewish immigrants, have been favored and granted extra benefits, while others, such as Arabs, were neglected.