Israel’s Growing Wealth Gap Threatens Social Breakdown, Economists Warn

Since the outbreak of war, Israel has significantly increased public spending, but economists warn that most of this additional expenditure has been directed towards emergency response, evacuation, compensation and initial rehabilitation efforts rather than strengthening core universal public services. Professors Yair Zimun and Oded Shorer have raised concerns that this approach is exacerbating income inequality in ways that could destabilise Israeli society.

The economists argue that while emergency spending is necessary in the short term, the failure to invest in broader public services—such as healthcare, education and social infrastructure—means that inequality continues to widen during a period when social cohesion is particularly fragile. Their concerns reflect a broader debate in Israel about how wartime budgets should be allocated and whether temporary emergency measures risk creating long-term structural problems.

Public expenditure has traditionally been used as a tool to reduce inequality and support universal services that benefit all citizens regardless of income. The current spending pattern, focused primarily on emergency and compensation payments, risks creating a two-tiered system where those with private resources can afford better services while public provision deteriorates. This could deepen social divisions at a time when national unity is seen as crucial.

Source: Maariv — Original article in Hebrew.