Global Policy Initiatives SPI Global Initiatives

Financial Hardship Increases During Ramadan in Israel

Oren Heller, Postdoctoral Research Associate, and Daniel Yeshua, Program Manager

Financial hardship among the Muslim Arab community in Israel increases during Ramadan, a survey from the Social Policy Institute at Washington University in St. Louis finds. This study, the first to examine the economic impact of Ramadan on the Muslim Arab population, can provide insight and strategies to support financial inclusion and building wealth among Muslim Arabs in Israel.

Arab society constitutes about 21% of the citizens of Israel (about 2 million) and includes 1.7 million Muslims, (18%) of the population of Israel. Despite being a citizen of the state, people who are Arab in Israel experience lower rates of educational achievement and lower rates of participation in postsecondary education as well as the labor market—most often with lower-wage jobs—as compared to people who are Jewish in Israel.

These disparate outcomes lead to a lower standard of living and consistently high poverty rates among the Arab population compared to the Jewish population. For example, in 2020, the proportion of Arab households in poverty was more than double (38.2%) the rate among Jewish households (16.6%). These inequalities also have a high economic cost for Muslim Arab households, which compounds during Ramadan.

Economic characteristics

SPI conducted its survey during the third week of Ramadan, April 19-23, 2022, to capture the economic impact of the holy month. Among those surveyed, 77% of Muslim men and 37% of Muslim women participate in the labor market. Employment rates of Muslim men are similar to those of Jewish men (82%), according to similar to data from the Central Bureau of Statistics (CBS) of Israel. However, the employment rates of Jewish women are nearly twice as high (69%) as Muslim women (37%).

The income of Muslim households is also relatively low. The median income of Muslim households is estimated at NIS 11,000, compared with NIS 16,300 among the general population as estimated by the CBS for 2018. Accordingly, only 55% of the Muslims interviewed in the survey indicate that they can afford an unexpected expenditure of NIS 2,000, compared to a significantly higher rate of about 83% among Jews, as shown by previous studies conducted at SPI in the past year.

During Ramadan, 79% of respondents said they practice fasting. Though not all observant Muslims abstain from work, respondents still indicated increased financial hardship during this time due to both loss of income and higher expenses.

Survey highlights during Ramadan:

  • 44% of Muslim respondents reported financial difficulty, particularly in the geographic periphery (North and South) of Israel;
  • Respondents reported working an average of 1.4 hours less per day; and
  • 17% of salaried workers and 38% of self-employed workers said their income declined;
  • 30% of individuals earning 6k-10k shekels (1,800 to 3,000 USD) per month reported a loss in income;
  • 68% of respondents reported higher expenses, particularly around the cost of food;
  • 67% of household use cash for expenses, though 25% of households are more likely to use a credit card during Ramadan;

Social and employer support for the Arab population, which accounts for 21% of Israeli citizens, can greatly support financial wellness during Ramadan. For example, employers can offer paid time off—particularly for low-wage workers. Additionally, the Muslim Arabs are less likely to own a bank account (11%) compared to Jews (1%), making it difficult to save for higher expenses or emergencies. Financial inclusion by way of digital banking could support the overall financial well-being for Muslim Arabs in Israel.