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Income Gaps in Israel Higher Than in Any EU Country

The average per capita income after taxes among Israel's top 20 percent of earners is 7.5 times that of the bottom 20 percent, while the average gap in the EU is 4.9 times, according to a Central Bureau of Statistics report.

Gaps between rich and poor in Israel are wider than those in any of the 27 European Union countries, according to a Central Bureau of Statistics report released on Sunday to mark the International Day for the Eradication of Poverty.

Average per capita income after taxes among Israel's top 20 percent of earners is 7.5 times that of the bottom 20 percent, while the average gap in the EU is 4.9 times, the report found.

The income difference between Israel's top and bottom 20 percent increased from 6.5 times in 2000 to 7.5 times in 2008, while in the EU, it rose from 4.5 to 4.9 times over the same period.

Nonetheless, Israelis on the whole remain more optimistic than their EU counterparts, the report found: 57 percent of Israelis polled believe their lives will improve over the next few years, compared with 32 percent of Europeans.

Nearly a third of Israelis - 29 percent - are at risk of falling under the poverty line, the study found, compared with just 16 percent in EU states.

The risk of poverty in Israel is 2 percent higher than it was at the beginning of the decade; the percentage for Europe dropped over that same period.

One in four Israeli children is at risk of being poor, a rate twice as high as that in the EU. One in three elderly Israelis is at risk of living in poverty, compared with one in five in the EU.

An individual is considered "at risk of poverty" in Israel when he could potentially lose his job, or when his monthly income divided by household size is less than NIS 2,000.

Over the past few years, EU states have seen a steady drop in the percentage of citizens at risk of poverty. In 2008, Greece and Spain had the bloc's highest rate with 20 percent - still significantly lower than that of Israel, with its far higher childbirth rate and lower percentage of wage earners. These are factors that can increase poverty.

The study found that in 2007, 21 percent of Israelis - 15 percent of Jews and half of Arabs - reported having forgone food due to financial difficulties. In Europe that figure was 11 percent.

But in apparent contrast to the rest of the report, 12 percent of Israeli respondents said they struggle to make ends meet, while in Europe the number was slightly higher, at 14 percent.

A mixed bag

Despite the growing socioeconomic gaps, the study found that Israelis are generally content with their financial situation. In 2008, 86 percent of Israelis age 20 and over expressed satisfaction with their standard of living, up from 83 percent in 2006.

In the EU, the number was 77 percent in 2008.

Economic contentment dropped in Europe due to the global financial crisis that began in 2008. Israel emerged from the crisis relatively unscathed.

Israelis are less optimistic, however, about their health. One in five described their own health as "not good," compared with 8 percent in the EU.