The Herbert M. Singer Annual Report Series State of the Nation Report Society, Economy and Policy in Israel 2017 Avi Weiss, Editor Taub Center for Social Policy Studies in Israel Jerusalem, December 2017 Taub Center for Social Policy Studies in Israel Established in 1982 under the leadership and vision of Herbert M. Singer, Henry Taub, and the American Jewish Joint Distribution Committee (JDC), the Center is funded by a permanent endowment created by the Henry and Marilyn Taub Foundation, the Herbert M. and Nell Singer Foundation, Jane and John Colman, the Kolker-Saxon-Hallock Family Foundation, the Milton A. and Roslyn Z. Wolf Family Foundation, and the JDC. The Taub Center is an independent, nonpartisan, socioeconomic research institute based in Jerusalem. The Center conducts high-quality, impartial research on socioeconomic conditions in Israel, and develops innovative, equitable and practical options for macro public policies that advance the well- being of Israelis. The Center strives to influence public policy through direct communications with policy makers and by enriching the public debate that accompanies the decision making process. This volume, like all Center publications, represents the views of its authors only, and they alone are responsible for its contents. Nothing stated in this book creates an obligation on the part of the Center, its Board of Directors, its employees, other affiliated persons, or those who support its activities. Editing and layout: Laura Schreiber and Tamar Friedman Wilson Translation: Miriam Himmelfarb, Shoshana London-Sappir, Julie Rosenzweig/Sagir International Translations Ltd. Copyright © 2017 Taub Center for Social Policy Studies in Israel All rights reserved Center address: 15 Ha'ari Street, Jerusalem, Israel Tel: 972 2 567 1818 Fax: 972 2 567 1919 Email: [email protected] Website: www.taubcenter.org.il Printed at Printiv, Jerusalem Board of Directors Chair: Michael S. Saxon Helen Abeles (First Vice-Chair, Governance and Administration), Jim Angell (Vice- Chair, Planning and Resource Development), Jim Koshland (Vice-Chair, Budget and Finance), Penny Blumenstein, Stuart Brown, Dennis W. Carlton, John Davison, Miri Eisin, Alan H. Gill, Ellen M. Heller, Stephen Lieberman, Motti Peer, Stanley Rabin, David M. Schizer, Caryn Wolf Wechsler General Assembly Chair: Caryn Wolf Wechsler Penny Blumenstein, Zvi Feine, Amir Halevy, Ellen M. Heller, Stephen Lieberman, Stanley Rabin, Michael S. Saxon, David M. Schizer, Steven Taub International Advisory Council Henry Aaron (Brookings Institution), David Autor (MIT), Mario Blejer (Banco Hipotecario), Aaron Ciechanover (Technion), Stuart Eizenstat (Covington), Han Entzinger (Erasmus University), Adam Gamoran (William T. Grant Foundation), Eric Hanushek (Stanford University), James Heckman (University of Chicago), Peter S. Heller (Johns Hopkins University), Daniel Kahneman (Princeton University), Robert E. Litan (Korein Tillery), Janet Rothenberg Pack (University of Pennsylvania), Burton A. Weisbrod (Northwestern University) Center Staff Executive Director: Avi Weiss Managing Director: Suzanne Patt Benvenisti Director of Research: Claude Berrebi Senior Director of Strategic Partnerships: Michal Rubin Kasanesh Ambao (Housekeeping), Dudu Barazani (Maintenance), Nachum Blass (Principal Researcher), Haim Bleikh (Researcher), Liora Bowers (Director of Finance, Operations and Policy Analysis), Gilad Brand (Researcher), Dov Chernichovsky (Principal Researcher, Health Policy Program Chair), Tova Cohen (Project and Government Relations Manager), Maya Dolgin (Director of Community Relations), Hedva Elmackias (Office Manager), Hadas Fuchs (Researcher), Inbal Gafni (Publications Editor), John Gal (Principal Researcher, Social Welfare Policy Program Chair), Nofar Gueta (Research Assistant), Shavit Madhala (Researcher), Lior Morag (Online Media Associate), Eitan Regev (Senior Researcher), Laura Schreiber (Operations and Publications Associate), Anat Sella-Koren (Director of Marketing, Communications and Government Relations), Yossi Shavit (Principal Researcher, Education Policy Program Chair), Kyrill Shraberman (Researcher), Alex Weinreb (Principal Researcher), Tamar Friedman Wilson (Content Manager) Past Directors: Israel Katz (z"l), Yaakov Kop, Dan Ben-David Policy Program Fellows Economic Policy Program Yoram Ariav, Adi Brender, David Brodet, Doron Cohen, Reuben Gronau, Jack Habib, Moshe Mandelbaum, Shuki Oren, Dan Peled, Assaf Razin, Haim Shani, Eytan Sheshinski, Shmuel Slavin, Avia Spivak, Michel Strawczynski, Shlomo Yitzhaki, Ben Zion Zilberfarb Education Policy Program Yossi Shavit (Chair), Chaim Adler, Shlomit Amichai, Hanna Ayalon, Shlomo Beck, Gila Ben Har, Carmel Blank, Inas Deeb, Yigal Douchan, Dalia Fadila, Yariv Feniger, Isaac Friedman, Yossi Gidanian, Eli Isenberg, Meir Kraus, David Maagan, Zamira Mevarech, Yael Navon, Rita Sever, Yehudit Shalvi, Shimshon Shoshani, Kemal Shufniyah, Sidney Strauss, Rami Suleimani, Yuval Vurgan, Zvi Yanai, Miri Yemini, Noam Zussman Health Policy Program Dov Chernichovsky (Chair), Dorit Adler, Alexander Aviram, Uri Aviram, Ran Balicer, Shlomo Barnoon, Roei Ben-Moshe, Yitzhak Berlowitz, Nakhle Beshara, Bishara Bisharat, Orna Blondheim, Adi Brender, Shay Brill, David Chinitz, Asher Elhayany, Leon Epstein, Zeev Feldman, Ronni Gamzu, Yigal Ginat, Iris Ginzburg, Dan Greenberg, Eitan Hai-Am, Jonathan Halevy, Eran Halperin, Avi Israeli, Orit Jacobson, Nir Kaidar, Avigdor Kaplan, Rachel Kaye, Jacob Menczel, Shlomo Mor- Yosef, Adi Niv-Yagoda, Meir Oren, Baruch Ovadia, Eran Politzer, Sigal Regev- Rosenberg, Mordechai Shani, Amir Shmueli, Haim Silber, Varda Soskolne, Yohanan Stessman Labor Policy Program Claude Berrebi (Chair), Hagai Atkas, Mark Feldman, Daniel Gottlieb, Eric Gould, Nitsa Kasir, Yaakov Loupo, Miki Malul, Guy Mundlak, Dalia Narkiss, Tali Regev, Dmitri Romanov, Moshe Semyonov, Ofer Setty, Sigal Shelach, Arie Syvan, Yossi Tamir, Aviad Tur-Sinai Social Welfare Policy Program John Gal (Chair), Mimi Ajzenstadt, Michal Almog-Bar, Uri Aviram, Shirley Avrami, Avishai Benish, Nissim Cohen, Abraham Doron, Israel Doron, Zvi Feine, Boni Goldberg, Daniel Gottlieb, Roni Holler, Nitsa Kasir, Chana Katz, Michal Koreh, Michal Krumer-Nevo, Lihi Lahat, Lia Levin, Ibrahim Mahajne, Miki Malul, Ronen Mandelkern, Menachem Monnikendam, Baruch Ovadia, Nadav Perez-Vaisvidovsky, Yekutiel Sabah, Talia Schwartz-Tayri, Shmulik Sheintuch, Sigal Shelach, Roni Strier, Yossi Tamir, Idit Weiss-Gal, Uri Yanay, Amos Zehavi Table of Contents Foreword................................................................. 9 Abbreviations ......................................................... 14 1. Macroeconomic Trends and Labor Markets The Macro Picture of Israel’s Economy in 2017 .............. 17 Gilad Brand, Avi Weiss and Assaf Zimring 1. Israel’s macroeconomic status ............................................................................ 17 2. Local price levels ................................................................................................... 26 3. The Israeli housing market ................................................................................. 35 Conclusion ................................................................................................................. 39 References .................................................................................................................. 40 Appendix .................................................................................................................... 41 Philanthropy in Israel: An Updated Picture .................. 45 Claude Berrebi and Hanan Yonah Abstract ...................................................................................................................... 45 Introduction .............................................................................................................. 46 1. Donor characteristics ........................................................................................... 49 2. The link between philanthropic characteristics and donation variables: A theoretical analysis ............................................................................................... 51 3. The link between philanthropic characteristics and donations: A multivariate regression analysis ......................................................................... 59 4. A comparison with the general population ...................................................... 73 Conclusions ................................................................................................................ 78 References .................................................................................................................. 80 Appendix .................................................................................................................... 84 Patterns of Haredi Integration into the Labor Market: An Inter- and Multi-Sector Analysis and Comparison ... 101 Eitan Regev Abstract ....................................................................................................................... 101 Introduction ............................................................................................................... 102 1. Haredi integration into the labor market: Major trends ................................ 105 2. Impact of education and personal characteristics on employment prospects and wages ................................................................................................. 120 Summary and