The distribution of the State budget

Debt servicing31%

Other17%

Defense17%

Social services35%

Total budget: 298 billion NIS, 2005

chart 1

The division of the social service budget

Personal social

services5%

Health16%

Education31%

Other10%

Income maintenance

38%

chart 2

Average per capita social expenditure: a continuous decline since 2001

8

9

10

11

12

13

14

15

16

1990 1993 1996 1999 2002 2005

Current budget, 2004 prices, NIS thousand

chart 3

Average per capita expenditure on transfer payments: the decline has continued

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

1990 1993 1996 1999 2002 2005

NIS thousand, 2004 prices

chart 4

Average government expenditure per pupil on education: a downward trend since 1996

9

10

11

12

13

14

15

16

17

18

1989 1991 1993 1995 1997 1999 2001 2003 2005

NIS thousand, 2004 prices, current budget

chart 5

Household expenditure on education and culture: expenditure in the top quintile is 5 times that of the lowest quintile

193336

468

656

936

1 2 3 4 5

Income quintiles

Monthly expenditure per standard person on education and culture, NIS, 2003

chart 6

The population’s level of education: Israel ranks high compared to most other countries

0

10

20

30

40

50

60

Me

xico

Tu

rke

y

Ital

y

Hu

ng

ary

Po

lan

d

Au

stri

a

Gre

ece

Sp

ain

Ko

rea

Bri

tain

Ge

rman

y

De

nm

ark

Ne

the

rlan

ds

Be

lgiu

m

Sw

itze

rlan

d

Sw

ed

en

No

rway

Ice

lan

d

Jap

an

Ire

lan

d

Isra

el

Can

ada

Percent with post-secondary or tertiary education, 25-64 year old age group

chart 7

High school matriculation over time: a continuous increase, although still only half receive certification

0

5

10

15

20

25

30

35

40

45

50

1965 1973 1980 1990 2004

Matriculation certification, percent of 17 year olds

chart 8

Matriculation certification by population group: major gaps in achievement between Jews and Arabs

37

54

13

31

1990 2004

Arabs

Jews

Matriculation certification, percent of 17 year olds

chart 9

Enrollment rates at universities: differences between population groups

Ages 20-29, percent

2004 1996 1990

9.9 9.8 8.0 Jews

Israeli born by ethnic origin

11.7 14.8 14.0 Israel

6.7 5.8 3.9 Asia-Africa

13.4 15.1 14.2 Europe-America

3.1 2.0 1.7 Arabschart 10

Enrollment rates in educational frameworks: gaps especially in younger age groups

57

62

84

99

98

93

87

82

4 2

3

4

5

14

15

16

17

34

81

91

97

95

100

100

98

93

Arab education Age Jewish education

Percent of age group, 2004

13-6

chart 11

Inactive youth: Israel in comparison to other Western countries

0

3

6

9

12

15

Den

mark

Sw

ed

en

Germ

an

y

Irela

nd

Can

ad

a

Au

str

alia

Belg

ium

Sp

ain

Isra

el

Sw

itze

rlan

d

Po

rtu

gal

Gre

ece

Bri

tain

Fin

lan

d

Italy

Fra

nce

Youth who are neither employed nor in school as a percent of 15-19 year olds (in Israel 15-17 year olds)

chart 12

Rate of children in single-parent homes, by group

4

10

17

Arabs Jews Immigrantssince 1990

Children in single-parent families: some 160,000 children under 17 live in single-parent homes

chart 13

Health expenditure and population size: government expenditure on health has not kept pace with population growth

80

90

100

110

120

130

140

150

1990 1993 1996 1999 2002 2005

Population Health expenditure

Index: 1990 = 100

chart 14

Financing of national health expenditure: a continuous rise in share of private financing of health*

28 28 2930

47

42 41 42

1998 2000 2002 2004

Households Government budget financing

*excluding health tax

Percent of expenditure

chart 15

Hospital stays: continuous decline in the number of beds and average stay in general wards

4.24.24.5 4.3 4.14.85.6

6.3

2.12.12.22.22.4

2.62.8

3.0

0

1

2

3

4

5

6

7

1980 1985 1990 1995 2000 2002 2003 2004

0

0.5

1

1.5

2

2.5

3

3.5

Average stay in days Beds per 1000 population

chart 16

Infant mortality: Israel rates well among European countries, but there are significant gaps between Jews and Arabs

12.3

9.7

7.8

5.84.3

9.8

7.9

5.6

3.6

26.0

19.7

15.8

9.98.3

12.4

1980 1985 1990 1995 2003

Europe

Israel - Jews

Israel - Arabs

Rate per 1000 live births

chart 17

Refraining from obtaining essential medical care due to cost - survey results: in some groups more than a third refrained from obtaining essential medical care

Percent in each group who refrained from obtaining care

22%

30%

35%

35%

31%

Total surveyed

Aged 65+

Low income

FSU immigrants

Low education

chart 18

Distribution of the National Insurance Institute budget: the main programs are old-age pensions and disability allowances

Old-age and survivors

42%

Income maintenance

7%

Other12%

Children12%

General disability

19%

Unemployment5%

Holocaust survivors

3%

Percent

chart 19

National Insurance Institute programs: differential development in the various programs

0

50

100

150

200

250

300

350

400

1990 1993 1996 1999 2002 2005

Disability Old-age/survivors Children

Index: 1990 = 100

chart 20

Income maintenance and unemployment allowance: a steep increase and reversal after 2001

0

1

2

3

4

5

6

7

8

1989 1995 2001 2005

Income maintenance

Unemployment

NIS billion, 2004 prices

chart 21

The level of poverty: an increase in the number of families below the poverty line

13

14

15

16

17

18

19

20

21

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Percentage of poor families after transfer payments and taxes

394,000 families

chart 22

Children in poverty: close to one third of all Israeli children live below the poverty line

10

15

20

25

30

35

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Percentage of poor children after transfer payments and taxes

714,000children

chart 23

Elderly and poverty: elderly households make up one fourth of the poor families

24%

20%

34%

Percentage of families with an elderly head of household out of all households and poor households, 2004

Out of poor families after transfer

payments and taxes

Out of poor families before transfer

payments and taxes

Out of all families

chart 24

The working poor: working is not a guarantee for getting out of the cycle of poverty

10.8

15.620.8

3.3

Salaried head ofhousehold

Self-employedhead of

household

Single incomehouseholds

Dual incomehouseholds

Incidence of poverty, percent, 2004

chart 25

The bottom quintile’s share in National Income: Israel ranks relatively low

0 2 4 6 8 10 12

U.S.Hong Kong

GermanyPortugalAustralia

ItalyTurkeyBritainIreland

IsraelSwitzerland

AustriaGreeceFrance

CanadaNetherlands

SpainBelgium

DenmarkSwedenFinland

Japan

Percent, 2001

chart 26

Population growth: Israel has a relatively high growth rate

-0.5 0 0.5 1 1.5 2

HungaryPoland

GermanyJapan

Czech RepublicItaly

FinlandFranceBritain

SwedenEU 15

NorwaySwitzerland

CanadaU.S.

MexicoNew Zealand

TurkeyIrelandSpainIsrael

Annual growth rate, 2004

chart 27

0

5

10

15

20

25

30

35

40

1950 1956 1962 1968 1974 1980 1986 1992 1998 2004

Natural increase: a decline resulting from lower birth rates

Rates per 1000 population

Birth rate

Natural increase

Mortality rate

chart 28

Immigration to Israel: addition to natural population growth

Thousands, by continent of origin

0

50

100

150

200

250

1949 1954 1959 1964 1969 1974 1979 1984 1989 1994 1999 2004

Europe-America Asia-Africachart 29

Population composition: Israel is still relatively young despite an aging population

Percentage of total population

0

5

10

15

20

25

30

35

40

0 2 4 6 8 10 12 14 16 18 20

Elderly

Ch

ildre

n

Israel 1955

Israel 2004Mexico

Turkey

Italy

EU15

France

Ireland

U.S.

U.K.Germany

Japan

chart 30

Labor force participation: the rate in Israel is relatively low

45 50 55 60 65 70 75 80 85 90

TurkeyPoland

IsraelItaly

SpainHungary

OECDIreland

BelgiumEU 15Japan

U.S.France

GermanyBritain

FinlandPortugalCanada

SwedenDenmark

Switzerland

Employment rate among 25-54 year olds, percent, 2004

chart 31

Per capita GDP: Israel’s international standing is worsening over time

101316192225

PortugalGreeceIrelandSpainIsraelNetherlandsItalyFinlandSwedenDenmarkNorwayU.S.Switzerland

US$, using PPP

Per capita GDP, 2004

17 22 27 32 37 42

PortugalGreece

IsraelSpain

GermanyItaly

FranceSwedenFinland

DenmarkNetherlandsSwitzerland

NorwayU.S.

Ireland

Per capita GDP, 1990

chart 32

Labor force participation over time: a continuous rise

46

47

48

49

50

51

52

53

54

55

56

1979 1984 1989 1994 1999 2004

Percent of those aged 15+

chart 33

Old-age and employment: participation of those 65+ has been halved over the last two decades

4

6

8

10

12

14

16

18

20

1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004

Percent of those aged 65+

chart 34

Dependency ratio of the elderly: Israel is relatively young compared to other developed countries

0

10

20

30

40

50

60

70

80

1980 1985 1990 1995 2000 *2010 *2020 *2030 *2040 *2050

Italy & Japan

EU

U.S.

Israel

* projections

The ratio between the elderly (65+) and the working age population, percent

chart 35

1.6

1.7

1.8

1.9

2.0

2.1

2.2

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004

Economic dependency ratio: stability in the 80s, improvement in the early 90s and stability at a lower rate

Ratio between those not employed and those actively employed

chart 36

Unemployment over time: continuous rise since the mid 90s

Percent unemployed in civilian labor force

10.4

4

6

8

10

12

1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004

chart 37

Unemployment compared to OECD countries: Israel ranks relatively high

0 2 4 6 8 10 12 14 16 18 20

SwitzerlandIreland

NorwayJapanBritain

SwedenU.S.

OECDCanada

ItalyEU 15

FinlandGermany

FranceTurkey

IsraelSpain

GreecePoland

Percent unemployed in civilian labor force, 2004

chart 38

Unemployment by region: in development localities, unemployment is particularly high

10.616.3 14.1

7.7

Urbanlocalities

Northerndevelopment

localities

Southerndevelopment

localities

Rural localities

Percent unemployed in civilian labor force, 2004

chart 39

Fear of unemployment – survey results: while fears have declined overall in the past two years, serious fears remain among 1/3 of the population

25 32 3443 32 32

2000 2001 2002 2003 2004 2005

Rate of respondents who feel greatly vulnerable to unemployment, percent

chart 40