IDEAS home Printed from
   My bibliography  Save this article

Government Support For Young Families In Israel


  • Adi Brender

    () (Bank of Israel)

  • Michel Strawczynski

    () (Hebrew University of Jerusalem)


This paper examines the policy option of providing government assistance to families with young children and financing it by increasing income taxes when the children leave home and the parents' wages rise due to their tenure in the labor market. We examine the expenditure composition and the characteristics of labor market participation of parents of young children (up to age 9) in Israel, and find that these families have higher expenditures than other families, and that their income in the years in which children are present in the household is lower than in the following years. We do not find evidence that the relative position of young families deteriorated during the last decade, except for the housing market where we identify a consistently rising share of these families residing in rented dwellings; such a trend did not develop among families without children or families with older children (aged 10–18). We also show that parents of young children are characterized by high employment rates and persistent employment. A comparison of government support for young families in other OECD countries with those in Israel for 14 representative family types—characterized by their structure and income composition—shows that it is higher in the other OECD countries for all of the family types. A simulation of raising the average benefits for young families in Israel to the level common in other OECD countries, while raising income tax rates at older ages in a way that keeps the policy fiscally balanced—and the individuals' lifetime income level unchanged—indicates that welfare can be increased substantially via consumption smoothing over the family's life cycle.

Suggested Citation

  • Adi Brender & Michel Strawczynski, 2015. "Government Support For Young Families In Israel," Israel Economic Review, Bank of Israel, vol. 12(2), pages 1-49.
  • Handle: RePEc:boi:isrerv:v:12:y:2015:i:2:p:1-49

    Download full text from publisher

    File URL:
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    1. David Card & Michael Ransom, 2011. "Pension Plan Characteristics and Framing Effects in Employee Savings Behavior," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 228-243, February.
    2. Alma Cohen & Rajeev Dehejia & Dmitri Romanov, 2007. "Do Financial Incentives Affect Fertility?," NBER Working Papers 13700, National Bureau of Economic Research, Inc.
    3. repec:boi:isrerv:v:7:y:2009:i:1:p:143-176 is not listed on IDEAS
    4. Atkinson, A. B. & Bourguignon, F., 1990. "The design of direct taxation and family benefits," Journal of Public Economics, Elsevier, vol. 41(1), pages 3-29, February.
    5. repec:boi:isrerv:v:4:y:2006:i:1:p:27-58 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:boi:isrerv:v:12:y:2015:i:2:p:1-49. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dafna Koby). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.