Israel Income Tax Gap Between Haredi and Non-Haredi Nears 1,000%
A new Israel Democracy Institute study reveals that income tax payments by non-Haredi Jewish households grew 7.5 times faster than Haredi households since 2009, with the tax gap nearing 1,000%.
Income tax payments by non-Haredi Jewish households in Israel have grown in real terms by 7.5 times more than those of ultra-Orthodox households since 2009, according to a comprehensive study by Dr. Gaby Gordon of the Israel Democracy Institute. The research highlights the widening economic gap, with income tax differentials between non-Haredi and Haredi households approaching nearly 1,000%.
The study reveals that the average income tax payment by ultra-Orthodox households rose by 12.5% in real terms—adjusted to 2024 values—moving from 240 NIS in 2009 to 270 NIS in 2024. In contrast, the average payment by non-Haredi Jewish households surged by 92%, climbing from 1,480 NIS to 2,840 NIS over the same period. Consequently, the tax payment gap between the two groups nearly doubled, growing from 517% in 2009 to 952% in 2024.
Impact of Yeshiva Studies on Lifetime Earnings
Dr. Gordon's research examines the Haredi lifecycle, demonstrating that a man's future earnings at age 40 decrease significantly the longer he remains in yeshiva. The data shows that 89% of young ultra-Orthodox men transition from high school-level yeshivas to advanced institutions at ages 17 to 18. Furthermore, 45% of Haredi men remain enrolled in kollels at age 30, and 27% continue studying in kollels even at age 40.
Men who leave the yeshiva system early achieve substantially higher wages later in life. A Haredi man who never entered advanced yeshiva studies earns an average of 71% of a non-Haredi Jewish man's salary. For those who leave by age 30, average earnings drop to 63% of the non-Haredi benchmark, and for those leaving between 30 and 40, the figure falls to 49%.
Employment Segregation and State Funding
Employment patterns heavily influence the wage gap. While 30.2% of Haredi men work in education, only 5.5% of non-Haredi Jewish men do. Conversely, only 4.8% of Haredi men are employed in the high-tech sector, compared to 19.1% of non-Haredi men. Among women, 51% continue studying education through state-funded programs despite a surplus of teachers, driven largely by political pressure and societal control mechanisms. Consequently, 42.5% of Haredi women work in education, while only 4.9% find employment in high-tech, compared to 9.4% of non-Haredi women.
