A bitter argument raged between religious and secular Israelis in recent years over whether a cut in child allowances would lead to a decline in the Haredi (ultra-Orthodox) birthrate. Anyone who thinks the Haredim will produce fewer children is making a big mistake, MK Shmuel Halpert (United Torah Judaism) once told Haaretz. "The government is somewhat afraid of population growth among the Haredim," he said. "But this won't help them."
The latest Bank of Israel report, however, includes a clear answer to the controversy: "The birthrate in the ultra-Orthodox sector has declined in recent years, while it has remained largely unchanged among the non-ultra-Orthodox Jewish population."
There were several reasons for the public battle to reduce child allowances. One was that over the years, the allowances had turned into special allowances for the Haredi and Arab sectors that enabled parents in these sectors not to work. In that way, they seriously damaged the gross national product. Another was that the allowances were extremely discriminatory, as fifth children - which are mainly found in Haredi and Arab families - received almost five times as much as first and second children. A long list of economists and other experts claimed that these allowances encouraged having children, thus giving rise to large families and poverty.
Did the cut in the allowances, which was implemented mainly in June 2003, really affect the birthrate? In the Arab sector, the answer emerged very quickly: After 17 years in which the Muslim birthrate had remained virtually unchanged, the fertility rate among Muslim women plummeted from 4.5 to 4 children by 2005 - in other words, in just two years. The change among the Bedouin was even more dramatic: During those two years, the fertility rate of Bedouin women declined by 1.5 children, from 9 to 7.6.
This past January, Haaretz reported on data from the Central Bureau of Statistics, gathered by researcher Gilad Malach, that revealed a significant decline in the Haredi fertility rate. According to this data, the overall fertility rate in several Haredi cities had declined by one child, from 9 children per women to 8. But ultra-Orthodox leaders continued to claim that for Haredim, childbearing is a religious commandment, so economic circumstances do not affect the birthrate.
The most recent Bank of Israel report (p. 345 in the English version) puts an end to this debate. It is based on three sets of data, including that amassed by Malach. "The average number of children up to two years of age in an ultra-Orthodox household in 2006 was 18 percent less than in 2001, and in ultra-Orthodox cities such as Modiin Elite and Betar Elite, the birthrate in those years fell by over 10 percent," the report said, citing the CBS data.
Another source on which the Bank of Israel based its findings is a study by Alma Cohen, Rajeev Dehejia and Dimitri Romanov, "Do Financial Incentives Affect Fertility?" The three researchers found that the 2003 reduction in child allowances lowered fertility significantly, and stated explicitly that the cuts' impact was greatest on Muslim Arabs and the ultra-Orthodox - almost four times as great as their impact on secular Jewish mothers. They attributed this difference to the fact that ultra-Orthodox and Arab families suffered a far larger cut in their 2003 subsidies.
Thus it turns out that everyone has financial considerations, even Haredim. Even if the cut in child allowances will not prevent Haredi parents from having big families (and there is no reason why it should), it will definitely increase the gap between the children. It turns out that Haredi parents, like all parents, ask themselves: "Will we be able to afford this child?"
Clearly, every family has the right to bring as many children as it likes into the world. But it does not have a right to require the taxpayer to pay for them. In the past, the taxpayer paid for most of the cost of raising Haredi children. Today, thanks to the cut in the subsidies, he pays for a smaller and fairer share.
In this connection, attention should be paid to another important statistic published by the Bank of Israel: "The poverty rate among ultra-Orthodox families peaked at 64 percent in 2005," but "fell to 57 percent in 2006/7." This is "apparently due to the increase in labor force participation and employment rates." Moreover, "the cut in allowances may have the effect of reducing the poverty rate in the future, as the result of its implications on the birthrate and labor productivity in the ultra-Orthodox sector."
Thus for all the hardship it caused, reducing the allowances was evidently the correct way to extricate the Haredi sector from the trap of poverty, and integrate it into the Israeli economy. We must therefore reject the Shas party's demand that we turn back the clock on the allowances.
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