Israel’s economic resilience and changes in Haredi employment, education, and poverty challenge Prof. Dan Ben-David’s dire forecasts, but persistent gaps and structural weaknesses still demand attention
For roughly 15 years, Prof. Dan Ben-David has warned about Israel’s economic future. His warnings are dramatic, his charts alarming, and the Haredi population repeatedly occupies a central place in his analysis.
Is the education system in crisis? Haredim. Is national labor productivity low? Haredim. Is poverty high? Haredim. Is the state budget under unsustainable pressure? Haredim again. It seems that for almost every economic challenge in Israel, this narrative points to a single address.
Meanwhile, Israel keeps changing. So does Haredi society. The question is whether Ben-David’s analysis is changing with them.
Despite a prolonged war and extraordinary disruption, Israel’s economy continues to demonstrate resilience. In its October 2026 forecast, the International Monetary Fund projected economic growth of 4.5% for Israel this year—the highest rate forecast for any of the 38 member countries of the Organization for Economic Cooperation and Development. The projection also represents an upward revision from the IMF’s earlier estimate of 3.5%.
Global companies continue to commit long-term resources to Israel. Nvidia, for example, has announced plans for a multibillion-shekel campus in Kiryat Tivon, designed to accommodate approximately 10,000 employees. Construction is expected to begin in 2027, with initial occupancy planned for 2031.
One of the world’s leading technology companies is betting heavily on Israel’s future. Perhaps Nvidia’s executives see strategic possibilities that somehow disappear between Ben-David’s demographic charts and the headlines.
An investment announcement does not disprove long-term structural risks. Neither does a single year’s growth forecast. But 15 years of dire warnings deserve examination against the country’s demonstrated ability to adapt, innovate, and attract investment. Resilience is part of the evidence, even when it complicates the argument.
A Changing Economy vs. Predictions of Catastrophe
For years, Ben-David has warned of an impending economic catastrophe driven in substantial part by Haredi dependency. Yet important economic indicators show considerable progress over the longer term.
According to data compiled and analyzed by the Institute for Strategy and Haredi Policy, which I founded, Haredi male employment rose from approximately 42.5% in 2010 to around 56% in 2026. Among young Haredi women aged 20–24, employment has reached 88%, based on employer payroll data processed by the institute. Meanwhile, the proportion of Haredi families below the poverty line fell from roughly 39% in 2015 to 32.8% in 2024.
These figures require some qualification. Employment estimates vary according to the population surveyed, the period covered, and the methodology used. Other research has found that the earlier rise in Haredi male employment stalled in recent years. Still, the longer-term gains, particularly among women, deserve recognition.
Poverty remains too high. Male employment must improve further. But the changes are meaningful in precisely the areas on which forecasts of future dependency depend.
I see this commercial vitality firsthand as publisher of the Mishpacha Media Group. Our platforms carry advertising for thousands of businesses and commercial ventures, many rooted in the Haredi community itself. Spanning real estate, finance, retail, and professional services, this activity reflects an entrepreneurial culture that cannot adequately be described as a population living in passive dependency.
The State Education Crisis—and Blaming the Untested
When Ben-David addresses Israel’s deteriorating education system, he quickly turns to the Haredi sector. Yet the relationship between disappointing international test scores and Haredi population growth deserves closer examination.
Haredi boys are largely absent from the Programme for International Student Assessment (PISA). Their exclusion leaves an important gap in our knowledge of their educational achievement, and Ben-David is right to be concerned about the implications of inadequate preparation for the labor market.
But their absence cannot explain the poor scores recorded among pupils who actually participate in the assessments. Those results reveal weaknesses in Israel’s broader education system that require attention regardless of Haredi demographic trends.
More troubling is the tendency to overlook the other half of the Haredi school population: girls.
In the 2025 PISA assessments, Haredi girls achieved an average reading score of 503, compared with 452 in secular state schools and 459 in state-religious schools, according to Israel’s National Authority for Measurement and Evaluation in Education (RAMA). Although these comparisons involve different student groups, RAMA found that no other female subgroup performed significantly better than Haredi girls in any of the three principal subjects assessed.
Rather than concentrating almost exclusively on the educational shortcomings of Haredi boys, Ben-David should also examine why Haredi girls perform so well in reading and what other schools might learn from their success.
Changes are also taking place in boys’ education. According to Education Ministry data processed by the Institute for Strategy and Haredi Policy, enrollment of Haredi boys in state-Haredi (mamlachti-haredi) schools rose from 4% in 2024 to 10% in 2026, a 2.5-fold increase in just two years. Specialized Haredi high schools, known as yeshivot tichoniyot, are also expanding.
These developments do not resolve the educational challenges facing Haredi boys, but they belong in any serious assessment of where the community is heading.
Productivity: Testing Ben-David’s Central Argument
Labor productivity is central to Ben-David’s assessment of Israel’s economic future. He argues that low skills and labor force participation among Haredim contribute to Israel’s weak productivity performance.
The question is how much of the national problem can reasonably be attributed to the sector.
According to calculations by the Institute for Strategy and Haredi Policy, Haredi workers account for approximately 6.5% of all hours worked in Israel. Using hourly wage differences as an indirect measure of productivity, the institute estimates that eliminating the wage gap between existing Haredi workers and other Israeli workers would raise average hourly earnings nationally by approximately 1.5%.
This is a limited calculation. Wages are an imperfect proxy for productivity, and the estimate does not capture the broader economic consequences of differences in education, employment, or future population growth. Nor does it measure the full potential gains from bringing more Haredi men into the workforce.
Even with those qualifications, it raises an important question: How much of Israel’s existing productivity gap can realistically be explained by earnings differences among workers who are already employed?
Ben-David himself has pointed to the weak productivity performance of Israel’s economy outside the high-tech sector, which employs roughly 90% of the workforce. Such a broad challenge demands an equally broad explanation, encompassing capital investment, physical infrastructure, market competition, regulatory burdens, and industrial structure.
Reducing the debate to Haredi participation risks overlooking problems affecting much of the national economy.
The Budgetary Argument: Are Haredim Citizens or Subsidies?
Ben-David attributes 37.5 billion shekels ($12.1 billion) in subsidies, discounts, and benefits to Haredi society, contrasting that sum with approximately 26.7 billion shekels spent on public hospitals and higher education. The comparison suggests that money associated with the Haredi population could otherwise finance additional research universities or medical centers.
The arithmetic is attention-grabbing. The framing requires scrutiny.
Before treating that entire amount as discretionary spending available for reassignment, we need to examine precisely what it contains. Which expenditures represent benefits available under general eligibility rules? Which are distinct sectoral allocations? How much could actually be redirected without affecting basic public services? And are the figures being compared calculated on the same accounting basis?
The comparison draws on different budgetary sources, including actual hospital expenditures and original higher-education allocations. Such differences should be explained before presenting the sums as interchangeable alternatives.
Haredim are citizens. Their children are entitled to education and healthcare under the same principles that apply to everyone else. Sector-specific allocations, tax burdens, and the distribution of public resources are legitimate subjects for debate. But spending associated with a population cannot automatically be treated as money that would otherwise be available for unrelated purposes.
Demography as a Future Asset
Across much of the developed world, aging populations and declining fertility threaten economic growth and the sustainability of public finances. According to Israel’s Central Bureau of Statistics, fertility among secular Jewish women stands at approximately 1.85 children per woman, below the commonly cited replacement level of 2.1.
In a world facing widespread population aging, a large younger generation can represent a substantial long-term economic asset. That advantage is not automatic. It depends on sustained investment in education, skills, infrastructure, and access to productive employment.
Children are future workers, entrepreneurs, and taxpayers, not merely line items in today’s public expenditures. A responsible demographic forecast must consider their potential contribution alongside the costs of raising and educating them.
Progress Cannot Be Ignored
Israel faces serious economic challenges, and Haredi society bears responsibility for helping address them. Recognizing progress does not excuse ongoing shortcomings or remove the need for structural reform.
The evidence points to substantial long-term gains in Haredi employment, particularly among women, changes in educational choices, and a reduction in poverty. Some trends have stalled, and major gaps remain. Both sides of that picture belong in any serious economic assessment.
Releasing alarming forecasts shortly before an election also calls for care in how evidence is selected and presented. Research on politically contentious questions must be especially rigorous about acknowledging developments that challenge its conclusions.
When demographic projections emphasize future risks while giving insufficient attention to changes already taking place, they risk presenting an incomplete picture of the country’s prospects.
The people inside the charts are changing. The analysis must change with them. Otherwise, the charts risk becoming illustrations for a conclusion reached in advance.
