How Official Statistics Distort the Situation of Israel’s Poor and Keep Alive Failed Government Programs

February 19, 2021 | Amiad Cohen
About the author:

In January, Israel’s National Insurance Institute (NII) released its yearly report on the economic situation of the citizenry, which paints a shocking picture, suggesting that one fourth of Israeli children live in poverty. Another government report puts the number at one in three. But, Amiad Cohen argues, these indices represent “a statistical fiction, radically different from the reality.” Worse still, the most recent NII statistics were deliberately reworked when the initial set appeared to downplay the effects of the pandemic:

In other words, the poverty indices misrepresent the number of people in serious financial need, often increasing [it] dramatically. These reports measure only a certain type of income and its distribution across society. They do not measure material deprivation and therefore do not provide any measure that would allow for the formulation of a policy to eradicate poverty.

The poverty index also completely ignores property ownership. Imagine that with hard work and good luck you [took the company you own public] and have a huge fortune of $10 million in your bank account. Thanks to this great fortune you have allowed yourself to go on a one-year vacation. During this year, you do not have a regular income. Well, according to the poverty index . . . you are considered “poor.”

Because the official poverty indices are flawed, government welfare policy based on these statistics does not and cannot provide a proper solution to real poverty. In the name of a “War on Poverty,” the government of Israel invests huge sums, much of which are wasted. [These expenditures make] only marginal contributions to those who are truly poor and suffering from severe material deprivation.

[These] problematic measurement methods are an excellent tool for preserving the power of the NII and for preserving the power of politicians. The way in which poverty rates are measured in Israel allows authorities to “play” with the data and move (through welfare distributions) families from below the poverty line above it, without contributing to their social mobility and without improving their real earning capacity. Unlike other in-kind income, the benefits are included in the calculated income and thus “results” can be easily achieved.

Read more on Jerusalem Post: