{"id":9410,"date":"2018-12-06T13:20:39","date_gmt":"2018-12-06T13:20:39","guid":{"rendered":"https:\/\/kohelet.org.il\/article\/basic-income-in-israel\/"},"modified":"2025-07-14T14:58:54","modified_gmt":"2025-07-14T14:58:54","slug":"basic-income-in-israel","status":"publish","type":"article","link":"https:\/\/www.kohelet.org.il\/en\/article\/basic-income-in-israel\/","title":{"rendered":"Basic Income in Israel"},"content":{"rendered":"\n

\u00a0Abstract:<\/strong><\/span>
The concept of \u201cbasic income\u201d has been garnering a lot of attention\u00a0in recent years, due to increasing concerns regarding inequality,\u00a0economic growth, technological unemployment and the\u00a0bureaucratic burden of the current welfare systems throughout\u00a0the world. However, no country has yet fully implemented\u00a0basic income, so the implications of such a drastic reform are\u00a0mostly unknown.<\/p>\n\n\n\n

The current research literature on this concept can be divided into\u00a0two strands. The first one includes papers which focus on field\u00a0experiments such as the \u201cMincome\u201d project in Canada during\u00a0the 1970s, or the more recent experiment in Finland. The field\u00a0experiments are usually focused on the unemployed and not on a\u00a0representative sample of the population, and because of their\u00a0limited scope they cannot be used to study some of the most\u00a0important aspects of basic income, such as its fiscal feasibility.<\/p>\n\n\n\n

The second strand of the literature includes simulations and back-of-the-envelope calculations, aimed at estimating the amount of\u00a0benefits which can be financed in a specific country, and to show\u00a0that basic income is feasible.\u00a0This paper belongs to the second strand of the literature. However,
the approach taken is somewhat more realistic than in\u00a0most of the other studies. Instead of ignoring the current Israeli\u00a0welfare system, we have tried to think of a way of transforming it into\u00a0a basic income system while minimizing the short-term change\u00a0in the income of most families, and while keeping the level of the\u00a0progressivity of the welfare system at the same level as before the\u00a0reform. Therefore, the amounts of the allowances recommended\u00a0for different age groups are based on the current benefits, and the\u00a0tax increase is designed to minimize the total change to inequality.<\/p>\n\n\n\n

Our main contribution to the literature is a full-scale simulation,\u00a0based on the Israeli Central Bureau of Statistics\u2019 Expenditure\u00a0Survey for 2016, which is used to estimate the fiscal feasibility of the\u00a0program and its impact on different types of families.\u00a0<\/p>\n\n\n\n

Overall, Israel\u2019s welfare system suffers from problems which\u00a0are also common in other developed countries, such as perverse\u00a0incentives and increasing bureaucratic burden. Basic income can be\u00a0a solution for these problems in Israel and in other countries, but the\u00a0specific details of the implementation will be different in different\u00a0countries. This paper might be useful to researchers\u00a0from other countries, because it describes a way to design a basic\u00a0income scheme in practice, not as a theoretical exercise but as a\u00a0reform that can be implemented immediately. For this purpose, the\u00a0effect on most households must be neutral, so no pressure group\u00a0will have an incentive to stop the reform, and a fiscal balance must\u00a0be maintained.<\/p>\n\n\n\n

The largest part of the puzzle which is still missing is the effect of basic income on the supply of labor. Thus, a good way to move forward is to use the current theoretical and empirical labor literature to estimate this effect, and to combine the estimation results with simulations such as the ones we are presenting here, in order to discuss the feasibility, the advantages and the disadvantages of such a drastic reform.<\/p>\n\n\n\n

For the full Hebrew paper<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"The concept of \u201cbasic income\u201d has been garnering a lot of attention in recent years, due to increasing concerns regarding inequality, economic growth, technological unemployment and the bureaucratic burden of the current welfare systems throughout the world.","protected":false},"featured_media":9411,"template":"","article-category":[525],"custom-tags":[666,555,667],"ppma_author":[52],"class_list":["post-9410","article","type-article","status-publish","has-post-thumbnail","hentry","article-category-publications","custom-tags-basic-income","custom-tags-policy-paper","custom-tags-welfare"],"acf":[],"yoast_head":"\nBasic Income in Israel - kohelet<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.kohelet.org.il\/en\/article\/basic-income-in-israel\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Basic Income in Israel - 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