Economic Resilience Index for Evaluating Poverty in Israel

Executive Summary​

​

• This document has been written for the committee appointed by the Prime Minister and Finance Minister to reevaluate the poverty index in Israel.​

• The Poverty Index should aid decision makers in long-term socioeconomic planning.Consequently, it must provide information that is relevant to the government's strategic goals.​

• The current Government of Israel has declared long-term socioeconomic growth and poverty reduction as national goals.In this context, the Reut Institute sees the 'Top 15 Vision' as the vision that should guide the State of Israel.​

• The Top 15 Vision is based on achieving a significant socioeconomic advancement that would put Israel among the fifteen leading countries in terms of quality of life within fifteen years.The vision requires significant and continuous growth of the Israeli economy in parallel with an improvement in the quality of life of all citizens.Cultivating human capital is the key factor in achieving this goal.​

• A clear correlation exists between poverty and human capital.A meaningful measure of poverty must account for the current use of and the potential to improve human capital.To permit effective policy design, the poverty index must identify the appropriate target population for government intervention.​

• In addition to the existing Poverty Line based on disposable income, The Reut Institute proposes the 'Economic Resilience Index', which would measure the ability of Israel's citizens to live in comfort, to improve their wellbeing, and to cope with unexpected changes.This index will be an important tool for the development of human capital.​

• The 'Economic Resilience' index integrates six pillars:disposable income, asset depth, consumption, employment security, health, and spare/free time.

• An understanding of the segmentation of the poor population is needed to create policy that effectively cultivates Economic Resilience and human capital.​

​