Population Projections for Israel, 2017-2040

In demographic terms, Israel is a unique country: it is characterized by an unusual combination of high fertility rates, low mortality rates, and positive migration. All of these factors lead to a rapid rise in population. In honor of Israel’s Independence Day, a new Taub Center study by Professor Alex Weinreb forecasts Israel’s population through 2040, using realistic assumptions regarding future fertility, mortality and migration patterns among the Jewish and Arab Israeli populations.

According to Taub Center projections, the country’s population will reach about 12.8 million in 2040, but with distinct patterns of growth in different age groups and subpopulations. Until 2027, the expectation is of a rapid rise in the number of Arab Israeli children; until 2035, there will be a sharp increase in the over-70 population; and in the coming two decades, the large cohorts currently in their 30-40s will age into their peak period of productivity and income.

Accordingly, appropriate measures should be taken to invest in growing educational sectors, and to integrate larger numbers into higher education and the labor market; and preparations should be made for old-age pensions and long-term care services. Understanding future growth patterns for each segment of the population will help policy planning for growing populations in Israel.

Mortality rates are trending down, and fertility rates among Arab Israelis will fall far below 3.0 births per woman by 2040

Mortality rates in all age groups – an important component in demography – differ by gender and between sectors. The Taub Center has found that mortality rates have been decreasing over the past decade in every group and in almost every age group (until age 89) – an indication of an overall improvement in the health of the population.

Nevertheless, there are differences: among Jews, the decline in mortality rates among men is greater than among women in every age group under age 55. Mortality rates among Arab Israelis – both for men and women – have decreased less than among the Jewish population in most age groups.

Another main factor influencing demographic forecasts is fertility rates. Births are the main component contributing to population growth in Israel. The number of births in Israel is very high relative to mortality rates and in comparison to other developed countries, and explains about 80% of the annual population growth.

Taub Center projections predict that the trends from 2000 will continue – a decline in fertility among Jewish women up to age 25, stability in the rate in women aged 25 to 29, and a marked increase in rate among those aged 30 to 44, although a certain slowdown in the rate of the increase is expected in the coming decade. Among the 35 to 39-year-old age group, the Taub Center expects a rise in fertility rates as women’s age at first birth increases alongside single-parenting.

Since 2000, fertility rates among Arab Israeli women have declined in every age group, principally among women under age 30. The forecasts project a continuation of this trend, with additional slowing, in view of the rising higher education levels among them and their increased participation in the labor market. The expectation is that these women will also begin to delay starting their families until an older age with a possible concomitant rise in fertility rates among the 30 to 44-year-old age group.
Age specific fertility rates

Forecasts show a sharp decline in fertility rates among women in their twenties, relative stability in fertility rates among Jewish women in the coming decade and then a decline, such that by 2030, the total fertility rate will dip below an average of 3 children per woman. Among Arab Israeli women, the decline in the fertility rate is expected to continue, such that by 2040, it will be an average of 2.75 children per woman.

Even if the rate remains stable in the coming 20 years, changes in the age structure of Jewish and Arab Israeli women below age 50 will result in differences in the number of births. As a result, the number of Arab Israeli women aged 20 in 2037 is likely to be the same as the number in 2017, while the number of Jewish women in 2037 is likely to be much higher than their number in 2017.

Migration is a difficult demographic component to predict since it may occur several times in an individual’s lifetime and may be influenced by historical events that are difficult to predict. The overall migration balance in Israel is positive and rising. Between 2002 and 2017, 184,000 net people immigrated to Israel, the vast majority below the age of 40.

This means that they contributed or will contribute to Israel’s population through births as well. What is more, due to Israel’s good economic situation relative to many OECD countries and worldwide, over the past few decades Israel has become an attractive destination for asylum seekers and for labor migration. Add to this rising antisemitism rates in the world, and the observed 20% rise in immigration in 2019, it is reasonable to assume that the flow of immigration will continue to be greater than the emigration rate.

The projection assumes that 20,000 immigrants and returning residents will enter Israel annually; 1,000 of them will be Arabs. In addition, 1,400 immigrants who enter annually for marriage, work, tourism, or to seek asylum, will succeed in becoming legal residents and will remain in Israel.

Forecasts for 2040: more than 12 million people, double the number of elderly, and a large group that will enter the labor market and institutions of higher education

The age structure of the population, that is the relative size of age groups, reflects past demographic events and also influences its demographic future. Israel’s population is relatively young – in the Jewish sector there are 140,000 infants versus 60,000 70-year-olds, and in the Arab Israeli sector, 42,000 versus only 5,300, respectively.

In both sectors, among younger people, there are more men, and the relation reverses in the older age groups, such that there are more older women, primarily among Jews. This also stems from higher mortality rates among men.

The Taub Center research indicates three essential differences in the population structure between Jews and Arab Israelis. One difference is that the Jewish population has grown slowly but consistently, such that every cohort is larger than the previous one, while among Arab Israelis the significant decline in fertility since 2004 has made younger cohorts similar in size.

A second difference is the fluctuating age structure among the Jewish population. Approximately every 30 years, an echo of the previous cohort can be identified (for example, the baby boom following a war or a large wage of immigration), while among Arab Israelis the structure stays relatively stable.

A third difference is the impact of aging processes: in 2017, among Jews, 8% of men and more than 10% of women were over the age of 70, as opposed to 2.5% of Arab Israeli men and almost 3.5% of Arab Israeli women.

Based on the Taub projections, the population of Israel is expected to grow from about 9.05 million in mid-2019 to around 12.8 million in 2040 (the principal scenario). The annual growth rate will fall across this period from 1.87% to 1.52%, driven by the reductions in fertility.

Other scenarios, which assume a slower reduction in mortality or fertility, change the final estimate. But across all scenarios, the projected final population in 2040 will range from 12.4 to 12.8 million, and the proportion that is Jewish/other will fall to 78%, where it will stabilize.
proportionate growth in the number of children aged 0-2, by sector

According to Taub Center predictions, a substantial increase in the number of over 70-year-olds is expected – from 669,000 in 2017 to about 1.41 million in 2040. This group is likely to have a majority of women, while a predicted decrease in mortality rates for men is expected to gradually decrease the ratio of women to men from 1.34 to 1.3 in the Jewish sector, and from 1.23 to 1.18 in the Arab sector.

The rate of aging in the Arab Israeli sector will be higher than in the Jewish sector: in the Jewish sector, the number of those over the age of 70 is predicted to increase by 88% (from 615,000 to 1.21 million), in the Arab Israeli sector, it is predicted to increase four-fold – from 54,000 to 197,000. This change has implications for employment and welfare among adults in general, and in the Arab Israeli sector, in particular.

In contrast, among children, there will be a decline in rates of growth in the Jewish sector: with the assumption that fertility rates will not change, this expected slowdown in the number of children born will occur because of the relatively low number of women in their early to mid-twenties. This trend is expected to change by 2030 – at which time, there is a predicted sharp increase in the number of annual births in the Jewish sector due to the number of girls reaching childbearing age.

Among Arab Israelis, the forecasts differ: although the fertility rate is declining, since large age groups have begun to enter peak fertility ages , this is likely to generate a notable rise in the number of births in the sector. This rise will stop when the next incoming age group, which is considerably smaller than the previous one, reaches ages 20 and 30.

In the middle section of the age pyramid is the large group of 30-40-year-olds who will age into their 50s within the next 20 years. This is where productivity and income tends to reach its maximum.

“On the one hand, the large number of people currently in their 30s embodies immense potential in terms of a rise in consumption and economic growth,” explains researcher Alex Weinreb, “but on the other hand, there is also a large group of 5 to 19-year-olds who will be entering the labor market and institutions of higher education in the coming years, and we should prepare for this.”

Growth rate predictions for 25 to 29-year-olds between 2017 and 2040 show a sharp increase from a current annual rate of 1%, to more than 2% in 2025 and 2.5% in 2035. These growth rates are likely to place substantial challenges before the Israeli economy.

Relating to the latest developments in the “coronavirus” outbreak, Prof. Weinreb adds: “It doesn’t seem as though the current Covid-19 pandemic (“coronavirus”) will have a large effect on mortality rates in Israel, or on life expectancy. Remember, every year, more than 45,000 people die in Israel, about 17000 of them from heart disease and cancer, so coronavirus is not, on its current trajectory, going to change any of the assumptions used to shape these projections.

What we know so far is that the average age of death is 82, and most of those people have had other serious health conditions. So it’s more an important test for the healthcare system, and for the political class than a demographically significant event in the population. That will be the case even if, God forbid, deaths head into the 1000s.”

“Israel is a unique country demographically. Its high fertility, low mortality, and positive migration all contribute to a rapid rate of population growth. It is important to understand how this growth is expected to manifest itself in the various population groups in order to determine the steps required to help Israel deal with the anticipated changes,” says Professor Avi Weiss, president of the Taub Center.

The Taub Center for Social Policy Studies in Israel is an independent, non-partisan socioeconomic research institute. The Center provides decision makers and the public with research and findings on some of the most critical issues facing Israel in the areas of education, health, welfare, labor markets and economic policy in order to impact the decision-making process in Israel and to advance the well-being of all Israelis.

For details, or to arrange an interview, please contact Anat Sella-Koren, Director of Marketing, Communications and Government Relations at the Taub Center for Social Policy Studies in Israel: 050-690-9749; 02 567 1818 ext. 110.