1) Israel’s success was built on education and high‑tech
- After independence, Israel invested heavily in research universities and scientific talent.
- This produced a world‑leading high‑tech sector, responsible for half of exports and extraordinary levels of R&D investment.
- But only 20% of the workforce—those in high‑tech, medicine, and academia—generate 93% of income tax.
2) A deep productivity divide
- High‑tech workers produce 22% above the OECD average.
- The rest of the economy—where 90% of Israelis work—lags 24% below the OECD average.
- Half the workforce is too poor to pay income tax.
3) The education crisis
- Israel ranks near the bottom of the OECD in PISA math, science, and reading.
- Half of Israeli children receive a core education below levels seen in many developing countries.
- The fastest‑growing groups are the least educated, especially the Haredim.
4) The Haredi demographic surge
- Haredi boys receive almost no secular education; from age 13 they study only Torah.
- Fertility rate: ~7 children per woman, compared with ~2 in other groups.
- Their share of the population doubles every 25 years.
- In 2023, they were 6% of 50–54‑year‑olds but 26% of children under five.
5) Municipal collapse as a warning
- Cities like Jerusalem and Arad show rapid socioeconomic decline as educated residents leave and Haredi populations expand.
- Secular students in Jerusalem fell from one‑third to 9% over 35 years.
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Source: "Israel’s neglected threat from within" by Dan Ben-David , president of the Shoresh Institution for Socioeconomic Research and emeritus professor of economics at Tel Aviv University.