OECD says yeshiva subsidies harm Israel socio-economic gaps

Israel should remove subsidies for yeshiva students to narrow socio-economic gaps in the economy, the Organisation for Economic Development (OECD) said in a report on Tuesday, Reuters reports.

It said that certain groups, especially the Haredim – or ultra-Orthodox Jews – and Arab-Israelis, are under-represented in the thriving high-tech sector and have low employment rates, working hours and wages. Overall, the share of Israel’s working poor is high and the country’s poverty rate is well above OECD norms, it said.

In addition to recommending removal of government subsidies for those studying in yeshivas, Orthodox Jewish seminaries, the OECD also advocated conditioning childcare support on fathers’ employment.

Only half of ultra-Orthodox Jewish men work in Israel, preferring to study the Torah and other Jewish texts in seminaries. Some three-quarters of Haredi women work, however, but their salaries are well below the national average.

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Israel’s ruling coalition of religious and nationalist parties has increased spending and boosted incentives to yeshiva students.

Moshe Gafni, who heads the ultra-Orthodox United Torah Judaism party and who is Chairman of Parliament’s finance committee, criticised the report.

He said that Jews have survived thousands of years due to Torah study “and Gentiles do not understand this.”

The OECD also recommended raising funding in Arab areas and re-introducing the bonus for second earners to the Earned Income Tax Credit.

In its Going for Growth report, the OECD said that, despite significant progress, barriers to foreign trade and investment remain high, with Israel’s foreign trade exposure lower than in other small OECD countries. It urged Israel to further cut tariffs and non-tariff barriers and streamline trade regulations.

It said Israel should move ahead with a plan to develop a wholesale electricity market and raise the share of renewable energy in electricity generation, saying Israel’s share is one of the lowest in the OECD.

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