Start planning now! What we can learn from Israel’s unique demography
Author: Taub Center Staff Bulletin Articles

Compared to other developed countries, Israel’s demography is extremely unique – a reality that is not only fascinating academically, but also has far-reaching implications for policymaking. Because of the way Israel’s population is structured, important elements of policy planning for the coming decades will look quite different from planning in the U.S., Europe, and the rest of the developed world. We will be discussing some of these differences in depth at the Taub Center’s upcoming Herbert M. Singer International Policy Conference: “Israel’s Unique Demography – Implications and Planning for the Future.”

Israel’s demography is unique in several ways. Firstly, Israel’s population is growing rapidly: the population is expected to grow from about 9.2 million people today to between 12.4 and 12.8 million by 2040. This is mainly due to very high fertility, much higher than in other developed countries. In fact, 80% of Israel’s annual growth comes from its exceptional fertility. Positive net migration into the country also contributes: in the last decade and a half, over 180,000 more people have immigrated to Israel than have left it. Finally, mortality rates have been decreasing over the past decade in Israel in every population group and in almost every age group. This, too, has driven growth, especially at older ages.

Together, these factors point to other characteristics that set Israel apart. First, Israel’s population is notably young. Israeli women have about 3.1 children per woman, on average, compared to an average of about 1.7 children per woman in other developed countries. This makes Israel’s fertility rate the highest in the OECD, and nearly one child more than its closest counterpart. The high fertility is not only coming from the country’s more traditional populations – Haredim (the ultra-Orthodox) and Arab Israelis – but also from secular Jewish women who have an average of 2.5 children.

In addition, Israel’s fertility defies all of the “demographic rules” that have governed fertility trends in other developed countries. The age at which women start having children and women’s education levels are on the rise in Israel – trends that in other developed countries have been accompanied by a decline in fertility.

In Israel, conversely, fertility has not fallen in turn. This results in a population structure shaped like a pyramid, as can be seen in the chart below, as opposed to the pear-shaped structure that characterizes most other developed countries. What’s more, these trends are broadly expected to continue. Among Jews, fertility rates are expected to slow in the coming decades, though an increase in the number of Jewish women reaching reproductive age in the 2030’s (currently in their early teens) will lead to a significant rise in the number of births even with those falling rates.

In the Arab sector, the timing of these changes is reversed. The fertility rate has been declining sharply in the Arab sector over the last 10 years, but large age groups of women have now begun to enter peak fertility ages, which is likely to generate a notable rise in the number of births in that sector over the next several years.
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Another factor that shapes Israel’s unique demography is that even with its relatively young population, the number of elderly is also increasing rapidly. The number of over 70-year-olds in the population is expected to double to about 1.41 million in 2040, with a higher rate of aging in the Arab Israeli population.

All of these trends require the attention of policymakers. A large influx of young children in the coming years has implications for Israel’s education system, including early childhood education frameworks, which will need to expand and adapt accordingly. The large share of children in the population makes it all the more important to address the quality of education and gaps in academic achievement in the coming years, as this could have a big effect on inequality in Israeli society in the coming decades.

Another policy implication is that we need to start preparing for the large age-cohort who are a little bit older – current 5 to 19-year-olds – who will be reaching maturity and entering the labor force in the coming years. This group is much larger than the group that entered the labor force in the last 15 years, posing significant challenges to the Israeli economy in terms of higher education, employment, and housing.

Furthermore, Israel’s age structure has implications for the health system on both ends of the age spectrum. High fertility makes areas like prenatal care a health priority. At the same time, the healthcare system will need to improve its long-term care infrastructure and its ability to provide health services to address the needs of Israel’s growing elderly population.

Demography is not destiny – it does not allow us to predict the future. But it does provide an insight into the policy challenges we will be facing in the coming decades. In this light, the upcoming conference (October 19th) will both address the factors behind Israel’s unique demography and its potential effects on these central areas of policy. If we start planning strategically now, we can be better prepared when that future comes.