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How is Israel‘s Middle Class Faring?: Income Trends, Occupational Change and the Rising Cost of Living
Thriving middle classes are the backbone of democratic and economically prosperous societies: they drive innovation, underpin economic resilience, and are essential for social cohesion. However, transforming labour markets and rising living costs have put pressure on middle-class households across many OECD countries. This review analyses trends in incomes, labour market outcomes, and consumption patterns of the middle class in Israel, putting the results in a cross-country context. It shows that Israel‘s middle class has enjoyed robust income growth over the last two decades, and that income inequalities have narrowed ？ distinguishing Israel from many other advanced economies. Despite this progress, Israel‘s middle class remains among the smallest across OECD countries. Substantial disparities persist in access to the middle class: young people have struggled to benefit equally from the expansion of the Israeli middle class, while ethno-religious minorities remain strongly underrepresented. Middle-income workers have experienced considerable occupational advancement into high-skilled roles, but persistent inequalities by gender and ethno-religious background endure, particularly in access to managerial roles and in wage levels. Meanwhile, rising expenditures on housing, food, and other core necessities have been putting pressure on household budgets, particularly for low-income households and ethno-religious minorities.
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