Israel Spends 75% Less on Families and Children Than OECD Average
A new Arlozorov Forum study reveals Israel spends 75% less on families than the OECD average and faces a NIS 205 billion civil service deficit, forcing citizens to fund basic public needs independently.
A new study by the Arlozorov Forum reveals that Israel spends 75% less on families and children compared to the OECD average, with a public expenditure of NIS 8,140 per person aged 0 to 19, contrasted with the OECD average of NIS 32,704. Adjusted for Israel's larger family size, the budget gap reaches NIS 53 billion. Researchers Shira Vibelsh and Yoni Ben Basat note that this disparity forces parents to cover essential costs—ranging from private tutoring and educational assessments to after-school care—largely out of their own pockets.
The findings extend far beyond child support, indicating that in 2025 Israel spent NIS 205 billion less on civil services overall than the OECD average, representing a gap of 9.6% of GDP. This shortfall covers critical areas including education, healthcare, welfare, and public infrastructure. Researchers emphasize that the deficit is structural and has persisted for decades, surviving fluctuations in defense spending and interest rates.
Education and Healthcare Shortfalls
The education sector faces a NIS 32 billion gap as of 2024, with upper-secondary education alone accounting for a NIS 19 billion deficit. Public expenditure per student remains roughly 43% lower than the OECD average for relevant age groups, fueling reliance on private educational supplements. In healthcare, the public spending gap stands at NIS 13 billion, heavily impacting hospitals, medical equipment, and public health services.
Researchers point out that even if OECD nations matched Israel's high defense-to-GDP spending ratio, Israel's civil expenditure would still lag behind by NIS 89 billion. Furthermore, while defense and interest expenditures declined relative to GDP from the 1980s until the outbreak of the war on October 7, successive governments chose to reduce overall public spending rather than channel the freed funds into civil services.
The Broader Economic Impact
While coalition funds—reaching roughly NIS 5 billion for 2026—frequently dominate political debates, researchers stress that canceling them entirely would barely dent the massive NIS 205 billion civil service deficit. Consequently, citizens continually absorb the costs of underfunded public systems, explaining why many families struggle to make ends meet despite broader economic growth.
