Religious Schooling, Secular Schooling, and Household Income Inequality in Israel

Income inequality in Israel is one of the highest among Western countries (Ben-David and Bleikh, 2013; OECD, 2013). Inequality in market income increased mostly during the 1980s and 1990s, while inequality in disposable income did not increase as much, because the government channeled more and more resources into the welfare system. But welfare payments were reduced sharply after the economic crisis of the early 2000s, and disposable income inequality increased immediately. The inequality problem received much more attention following the social protests that erupted in the summer of 2011 (Shalev, 2012), which were in fact triggered by the cost of living, but have led to the understanding that young couples find it more and more difficult to cope without their parents’ support, and relying on parents’ support intensifies intergenerational social immobility. Recent research has shown that despite the fact that in many western countries the decrease in the output share of labor is considered a major cause of the increase in inequality (Summers and Balls, 2015), in Israel this decrease occurred parallel to the decline in market income inequality (Kimhi and Shraberman, 2014). Hence, the sources of inequality should be traced elsewhere, and the labor market is the major candidate. Indeed, Ben-David (2009) has shown that there are considerable employment gaps between Jews and Arabs and between men and women, and that higher education might be the key to closing these gaps.