Spatial Inequality in Israel, Tal and Leventhal, 2018

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In international comparison, income inequality in Israel is very high. The growth in income disparities and wealth leads many to be concerned that Israel is becoming a divided and segregated society, a country of the poor alongside the rich. One way to examine social inequality in Israel is through an analysis of neighborhood characteristics. Have income disparities led to an increase in economic segregation, where the rich and poor are concentrated in separate neighborhoods? Have neighborhoods in Israel become more homogeneous in terms of the socioeconomic status of their resident population over the years?

To answer these important questions, we conduct, for the first time in Israel, a systematic examination of the development of economic segregation in major cities in Israel over the past three decades. Economic segregation refers to a situation where residents are segregated by income, so a higher proportion of the wealthy live in upscale neighborhoods, while the poor are concentrated in impoverished neighborhoods.

Using commonly accepted measures of economic segregation found in literature and parallel research conducted in the United States, we examine the level of economic segregation in Israel in four major cities - Tel Aviv, Jerusalem, Haifa, and Be'er Sheva - over three and a half decades: 1983, 1995, and 2008. The results are unambiguous. We find that economic segregation has increased in all four cities over the three decades studied.

The data indicates a significant increase both in the concentration of wealthy households in upscale neighborhoods and in the concentration of poor households in impoverished neighborhoods. These findings are like those observed in parallel research conducted in the United States during the same period, where a continuous increase in economic segregation was also measured over the past decades. In this study, we do not provide an explanation for the observed increase in economic segregation in Israel, but we explore several potential explanations for this phenomenon. Finally, we raise the question of whether it is possible to halt and reduce the processes of segregation in Israel and propose several strategies in the field of housing policy that have been adopted globally to address the growing phenomenon of segregation.

The main findings are:

On average, economic segregation increased by 65% during this period.

In Tel Aviv, the growth in economic segregation was the most moderate (8 index points), while in Be'er Sheva, it was the most extreme (53 index points).

During the period under review, the concentration of poverty increased in three out of four cities (Haifa, Be'er Sheva, and Jerusalem) and decreased in Tel Aviv.

The increase in economic segregation cannot be explained by changes in the ethnic composition of neighborhoods.

The process of economic segregation is correlated with the overall increase in income inequality in the country over the period studied.