News Global Initiatives Socioeconomic Impacts of COVID-19 SPI Press Release

The Far-Reaching Impacts of COVID-19 on the Financial Lives of Israelis – Differences by Religion and Ethnicity

Press Release: October 25, 2020

With a COVID-19 death toll exceeding 2,000, Israel now has one of the highest per capita deaths in the world. Feelings of frustration and despair have resulted in the largest anti-government demonstrations since the establishment of the country, emphasizing that a central crisis during the COVID-19 is a growing divide among the main religious and ethnic groups in Israel: non-Haredi Jews, Ultra-Orthodox Jews (Haredi), and Arab Israelis.

The social and economic crises stemming from COVID-19 will have impacts lasting many years. To study the social and economic effects of the pandemic in Israel, the Social Policy Institute at Washington University in St. Louis conducted a nationally representative online survey with approximately 2,300 Israeli respondents between June 4 and July 1, 2020. The survey included nearly 150 questions covering a wide range of social and financial characteristics, taking respondents around 20 minutes to answer.

Arab and Haredi individuals are much more likely to be unemployed or furloughed during COVID-19

During the pandemic, Israelis have experienced an employment shock of a staggering magnitude. More than one-fourth of all survey respondents reported that they experienced a temporary and/or permanent job loss between April and June 2020, and the extent of these losses during the pandemic vary strongly across religious/ethnic groups.

While 20% of Arab Israelis were still furloughed or unemployed in June, only 13% of non-Haredi and 14% of Haredi Jews remained furloughed or unemployed (Figure 1). This is particularly alarming because Arab Israelis (13%) were more likely to report being unemployed prior to COVID-19 than non-Haredi and Haredi Jews (7%).

Figure 1. Employment status in June 2020

Arab Israelis have experienced the highest levels of material hardship

The disproportionate impact of COVID-19 on employment can lead to downstream effects, such as material and financial hardships. Given that Arabs experienced the greatest job losses and furloughs it is unfortunately not surprising that, compared to non-Haredi Jews, Arab Israelis were three times more likely to experience mortgage/rent delinquency (Figure 2), more than three times as likely to be behind in bill payments (Figure 3), and twice as likely to experience food insecurity (Figure 4). One in three Arab Israelis over-drafted a bank account whereas one in five non-Haredi Jews and one in four Haredi Jews did. More than half of Arab Israelis reported that their credit card payments increased during the pandemic; payments that may become increasingly difficult to continue to sustain as the pandemic persists.

Figure 2. Mortgage and rent payment delinquency

Figure 3. Behind on bill payments

Figure 4. Food insecurity

Arabs were at a clear disadvantage in being able to cope with the COVID-19 crisis

The amount of assets held by households[1] in different religious/ethnic groups have is essential when trying to understand these groups’ varying levels of material and financial hardship. According to our survey, the median asset amount of Arab Israelis was less than one-sixth of the median asset amount of non-Haredi Jews (NIS 20,000 vs. NIS 125,000, see Figure 5). Almost half of the Arab Israeli respondents reported that they could not afford to access NIS 2,000 if a financial emergency arose within the next month. This rate is much higher than those of non-Haredi Jews (19%) and Haredi Jews (26%, see Figure 6). Furthermore, more than half of Arab Israeli respondents reported that their emergency or rainy day savings would last less than a month; the proportion of non-Haredi Jews (26%) and Haredi Jews (34%, see Figure 7) reporting the same was substantially lower.

Figure 5. Median asset amounts (NIS)

Figure 6. Access to financial resources in an emergency

Figure 7. Sustainability of emergency savings

Addressing these inequalities requires a more equitable government response

Arab Israelis have not had the same level of access to COVID-19-related government benefits Almost 20% of Arab Israelis reported being denied COVID-19 related government benefits as compared to less than 10% of non-Haredi and Haredi Jews (Figure 9) during the early stages in the pandemic.  

Figure 9. Government benefit rejection rates

The need for unity amidst uncertainty

Social and economic divisions among Arab Israelis, Haredis, and non-Haredi Jews existed long before the COVID-19 pandemic. However, the COVID-19 pandemic presents an opportunity to create and build a future of a “new normal” – a society with less inequality and more cohesion. With no clear end to the pandemic in sight, the Israeli government must come together to ensure that the most vulnerable people are not left behind and supported during this challenging time. We are only as strong as the most vulnerable in our society. Only through efforts to close health, social, and economic inequalities in our country will we be able to properly weather and navigate the pandemic.

[1] The asset amount includes cash at home or safe, in a bank account, work funds, and other investments/property.