Policy changes will impact ultra-Orthodox

No, this column is not about how much Israelis give their kids for the weekly stipend. It’s about a seemingly “abstruse” issue, but with huge implications for the future of Israeli society and economy.

As do several other countries in the world, Israel grants a monthly stipend to parents for each child until he or she reaches age 18. This is to indirectly encourage larger families by helping to economically support the family per child (and it surely is a factor in Israel’s very low malnutrition rates). While the child allowance is not the main reason that Israel is one of the few Western countries with a “positive” birth rate (above generational “replacement” of 2.1 kids per family), subsidizing children certainly doesn’t hurt.

Or so the logic goes. But as they say, the devil is in the details. Try this thought experiment: What would happen if the state gave $50 a month for the first child, $75 extra for the second kid, an additional $100 just for the third one, and continued to increase the sum as the number of children in any family goes up? The answer: It could very well constitute a powerful incentive for certain people to have more children.

Which “certain people”? These sums are proportionally significant only for people who have no other income. In Israel, that means the ultra-Orthodox (as a not-so-gross generalization; obviously there are other unemployed people too, but none from a discrete sector of society). And indeed, Israel was witness to a unique phenomenon on the world stage these past 30 years: the only population group on the globe to increase its fertility rate was the ultra-Orthodox sector in Israel. Everywhere else, fertility rates have dropped or stayed steady.

What happened 30 years ago? The newly elected Begin government, in order to ensure the coalition loyalty of its ultra-Orthodox partners, changed the payment scale from an identical stipend for every child to the upward-sliding scale mentioned above. As the haredim (ultra-Orthodox), in any case, were practically the only group that already had more than six children per family, the stipends at the top of the new sliding scale were truly significant only for ultra-Orthodox. (Even Israeli-Arab average birthrates have plummeted: from 9 children per mother in 1948 to a mere 3.5 children today!)

No one is against haredi birth rates per se – but the vast majority of Israelis are against heavily subsidizing the one sector of society that doesn’t send its men to the work force, especially if such subsidies come at the expense of state aid to those who do work. This is precisely why the child allowance policy of Israel’s new government is not only widely popular but hugely significant for the country’s future demography: The child allowance sliding scale is not only going to be abolished, but the absolute sums for the first child (and all others) will be cut too!

With an already huge economic vise squeezing Israel’s haredi community, given decades of poverty, this will undoubtedly constitute a death blow to their “no-work – only-Torah” policy. And once in the work force (after army service and some advanced, secular education), the ultra-Orthodox birth rate will ineluctably decline, as it has everywhere else under the modernization process.

Has Israel turned away from its child-friendly policy? Not at all. Several other policy innovations constitute “other sides of the coin”: free child care for all children, ages 3 to 6; increased subsidies for housing among those gainfully employed (especially if both parents work) and so on. If anything, Israel is pouring more money into its children (e.g., it has just completed a major reform of the K-12 educational system, with significantly increased teacher pay but higher educational standards for teachers).

In sum, the new government is reshuffling the child subsidy deck: a lot more for those who are trying to productively help themselves and far less for those who heretofore have been “free-riders.”

PROF. SAM LEHMAN-WILZIG (profslw.com) is deputy director of the School of Communications at Bar-Ilan University in Israel. This spring, he is Visiting Professor at the Israel Studies Center, University of Maryland, College Park, Md.