Israel's Population Is Growing at a Dizzying Rate. Is It Up for the Challenge?

By 2065 Israel is slated to be the second-most crowded nation on earth. Can it continue to grow like Nigeria while maintaining a standard of living like the Netherlands?

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A woman walks past construction sites in Beit Shemesh, October 26, 2020.
A woman walks past construction sites in Beit Shemesh, October 26, 2020.Credit: Emil Salman

In 2017, the National Strategic Housing Plan was approved. This was a major leap forward in planning, as for the first time, Israel tried to assess what its housing needs would be in the coming decades and set targets for the number of apartments to be planned and built. The targets were ambitious: 2.6 million apartments planned and 1.5 million apartments built by 2040, to meet the need to house Israel’s growing population, forecasted to reach 13.2 million by then, or four million more than today.

Israel’s population is growing at the dizzying pace of two percent a year, four times the average of just 0.5 percent in other developed countries. This has many ramifications, one being the need to build a huge number of apartments to house all the Israelis who are going to be born in the coming years. According to the Central Bureau of Statistics, by 2050 Israel’s population will hit 15.7 million, a 75-percent increase over the current population; and by 2065, will be up to 20 million, more than twice as much as now.

'We’re nearing the moment when the quantity of life will harm the quality of life'

To meet the goal of building 1.5 million new units within two decades, the Strategic Plan divides the planning and building objectives into interim periods. For example, by 2020, the target was 52,000 units built per year, followed by 61,000 units per year after that. We checked how those goals are being met and found that the Planning Administration has met its targets so far and even planned more apartments than stipulated. However, not so surprisingly, the pace of building has lagged.

From 2017 through mid-2020, 178,000 apartments have been completed, for an average of 51,000 units per year, slightly below the target number. Given the number of housing starts since 2018, and considering that the rate of building completion in Israel has stretched to 30 months, the forecast for the next two and a half years is the completion of 52,000 units per year – exactly the rate that was set for the start of the effort, and far from the much higher target of 61,000 new units per year for this stage of the plan.

A traffic jam of the road leading to Jerusalem, 2019.Credit: Olivier Fitoussi

Expect a housing crisis

Looking at how things have progressed over the past few years, and with the coronavirus crisis having highlighted the government’s inept and ineffective decision-making and its inability to follow through, it’s hard to be optimistic about the odds of Israel being able to build another 1.5 million apartments in the next two decades. Such cynicism is understandable, but not entirely fair. Even countries with much greater capabilities would likely struggle to meet a target of increasing their supply of housing units by 75 percent in 20 years. This would be a daunting task for any country, and certainly for one like Israel.

Israel has set itself this unprecedented building task because of our massive natural growth: an average of 3.1 children per woman, compared to the average of 1.7 children across the other developed countries. No other developed country has grown at the rate Israel has, leaving no other country to serve as an example. Quite the opposite – Nearly all the developed countries are growing at a rate below the rate of preserving their population size (2.1 children per woman) and contending with the problems of having an aging, shrinking population. Israel, on the other hand, is contending with problems that are more typical of developing countries with high birthrates.

In developing countries, exploding population growth directly impacts the standard of living. Lagos, Nigeria is bursting with 25 million people, many living in wooden huts planted on stilts in the city sewage. Israel seeks to do the impossible: to grow like Nigeria while maintaining a standard of living akin to Holland’s. Huts over the sewage is not a solution that will work for Tel Aviv or Bnei Brak.

People shop at a market in Lagos, Nigeria, October 24, 2020.Credit: Temilade Adelaja/Reuters

How can it be done? No one knows, since there is no precedent. The unique Israeli experiment – Third World natural growth, First World standard of living – presents Israel with unparalleled managerial challenges. Professor Dan Ben-David of the Shoresh Institution for Socioeconomic Research says that in terms of per capita density per square kilometer, Israel currently ranks fourth among OECD countries, after South Korea, the Netherlands and Belgium. By 2031, it will be second only to South Korea, and by 2065 Israel is on track to become not just the most densely crowded nation among the developed countries, but the most crowded of all the 180 nations on earth, with the exception of Bangladesh.

Most Israelis probably give little thought to the implications of this trend. “Zafuf”– the Israel Forum for Demography, Environment and Society, run by Professor Alon Tal, head of the Tel Aviv University School of Public Policy, is one of the few organizations addressing the issue of the country’s rapid population growth. The current housing crisis, which, given the tremendous need for more construction, will evidently continue, is just one of the consequences of Israel’s high population density. Other aspects are the overcrowded classrooms, the exceedingly long waits for emergency care, the overflow of patients in hospitals, the perpetual traffic jams, court proceedings that are delayed for months and years and, of course, the jam-packed crowds at nature sites on weekends and holidays. With an additional 1.5 million housing units, which would naturally eat up a major chunk of the country’s open spaces while transforming Israeli cities into clusters of high-rises, undeveloped nature areas here will become an endangered resource.

“We’re nearing the moment when the quantity of life will harm the quality of life,” Tal says, citing the example of the Lake Kinneret beaches, which have to be closed to visitors during the Passover holiday every year when they fill to capacity, as an illustration of limited resources and our inability to cope with the increasing population density. “You can’t talk about standard of living without also talking about quality of life – the ability to go out and enjoy nature without being surrounded by mobs of people; to have a seat on the train and not stand in the aisle with hundreds of passengers; and then there’s the question of employment for young people: With so many children being born, what employment will we have to offer them, especially in an age where AI is replacing human labor in many fields?”

The price of overcrowding

Well before we become another Bangladesh, Israel is already paying a high price for its tremendous population density. Professor Manuel Trajtenberg, who headed the government committee formed in wake of the 2011 social justice protests, says that the high natural reproduction rate leads to high natural growth in GDP, but also causes expenditures to rise due to the need to build more infrastructure to serve more people. As of now, Israel must increase all of its infrastructure by 2 percent annually just to hold steady in terms of infrastructure service per person.

Manuel Trajtenberg poses for a photo at his home in Tel Aviv, April 2020.Credit: Tomer Appelbaum

Since, in Israel, infrastructure grows at below the necessary two-percent rate on average, the result is an ongoing decline in the level of services and ultimately, in per capita GDP as well. The 2011 protest was a stark illustration of this: The protests were sparked by the high costs of housing and the poor level of service in the education system. And since then, Israel has not made progress on either front. The housing crisis has even worsened in the years since the protest. Trajtenberg projects that if Israel’s natural growth would decrease from its current level of two percent a year to the average rate among the developed countries of 0.5 percent, the country’s per capita GDP would double by 2050. He notes, as well, that while the government encourages a high birth rate by granting child allowances, it essentially abandons all these children once they are born, sending them to overcrowded and lackluster schools, and not providing for free preschool.

“The lack of consistency in government policy in this area is appalling: On the one hand it grants universal child allowances, which are ineffective and convey a message of promoting larger families, while on the other hand it shirks responsibility for providing services for these children and easing the burden on their parents,” Trajtenberg writes in an essay for the Zafuf forum. “While these young families are having a large number of children, the government refrains or retreats from providing the services that will make this possible without leading these families into a dire financial situation.”

The idea that Israel would adopt a policy to reduce the birthrate is considered taboo, though such policy is standard in many places

One of the services that has already been severely impacted by our burgeoning population growth is the health system. The five-hour wait (at least) required in the emergency room and the ever-longer wait for appointments with medical specialists and for surgery are clear indicators of the steadily mounting burden on the system. Israel lags far behind the developed countries in the number of nurses and hospital beds per capita. The average age of physicians is high while the number of medical students is relatively low.

Another negative indicator is the number of people who die from infections in the hospitals. Israel holds the dubious title of having the highest mortality rate from such infections – almost 6,000 people a year, and the overall mortality rate in Israel is among the highest for developed countries. The high number of infections can be attributed to the massive patient load in Israeli hospitals which on average are at 94-percent capacity, the highest rate among the developed countries.

Lessons of the pandemic

The lethal aspect of the population density in this country was brought to the fore by the pandemic, as the main virus hotspots have been in the poorer and more densely crowded population groups that tend to have very large households – the ultra-Orthodox and the Arabs. The high population density in these groups, combined with certain cultural factors, made them the main driver of infections in the second wave. With an average of nine people per household living in tight quarters, there was practically no way to stop the virus’ spread in the ultra-Orthodox community.

It is this aspect that makes the population density in Israel that much more dire: The country’s population growth is concentrated for the most part in the weaker and less educated socioeconomic groups, the Arabs, with an average of three children per woman, and especially the ultra-Orthodox, with an average of seven children per woman. These are the two poorest population groups in Israel, with the lowest rate of participation in the workforce, and they have a higher tendency to be poorly educated.

Pedestrians at Jerusalem’s crowded Mahaneh Yehuda market, December 17, 2020.

The Arab public school system is not providing its graduates with a good education. Arab pupils’ consistently score much lower on the PISA (Program for International Student Assessment) exams than Jewish pupils. The ultra-Orthodox school system is private and does not teach a core curriculum, making it near-impossible for tis graduates to integrate in the workforce. So not only is Israel’s population multiplying at the rate of a developing country, the education available to a large percentage of these children is not much better than the education in developing countries.

As Trajtenberg notes, the paradox is that while Israel is sinking under a surplus birthrate and overpopulation unrivaled in the developed world, government policy is to promote larger families. The Israeli system of government allowances is aimed at aiding families “blessed with [many] children” – the term itself illustrates the Israeli attitude that children are a blessing. And obviously, the more Jewish children that can be born, the better, so as to contend with what is regarded as the Arab demographic demon.

As a matter of fact, over the past two decades, the birthrate for Muslim women has plunged from an average of nine children to just three; Druze women now have the lowest average birthrate (two children), and ultra-Orthodox women are way ahead in first place with the highest birthrate. But the concept of a demographic war being waged via a woman’s womb continues to spur policy and to accelerate Israel’s destructive population growth.

Practically the whole support system in Israel encourages having children. From the child allowances, which absurdly reach their highest point from the second through fourth child, to the daycare subsidies for families based on per capita income (the more children and fewer wage-earners a family has, the more aid it receives), to all the different discounts offered, such as in municipal property tax, also based on a similar calculation. The more children you have, the more the state will help you. And thus it encourages a higher birthrate.

The idea that Israel would adopt a policy to reduce the birthrate is considered taboo, though such policy is standard in many places. In the 1960s, when Singaporean women were having an average of 6.5 children, the Singapore government blocked admission to leading schools for the third child onward. Today, the average birthrate in Singapore is 1.5 children per woman and the government provides generous grants to every mother, tax benefits and savings for every child, and also subsidizes long maternity leaves – all to try to encourage Singaporean women to have slightly more children.

A crowded Sunday morning at Tel Aviv's Savidor Center train station, February 2011.Credit: Nir Kafri

Singapore is no exception. China has moved from a one-child policy to a policy that promotes two children per family. Japan, the only country in the world whose population is shrinking due specifically to a low birthrate, gives women grants of thousands of dollars for each child. France has managed to increase the national birthrate by extending maternity leave – from 16 weeks for the first child to 26 weeks for the third, and has a welfare system that supports families. On the other end of the spectrum, Assam state in India recently announced sanctions on families with more than two children. The parents will not be permitted to work in government jobs or to receive discounts in public housing.

All over the world, countries are using economic tools to try to impact the birthrate, to increase or decrease it, depending on whether their birthrate is higher or lower than the balance rate of 2.1 children per woman. If such policy is a legitimate tool in Japan, France and Scandinavia, why shouldn’t that be the case in Israel too? With an average birthrate of 3.1 children per woman, we clearly need a policy to slow the birthrate rather than boost it.

A league of its own

Ben-David analyzed the relationship between per capita GDP and family size in 173 countries. The results clearly showed that the more affluent countries (over $30,000 per capita) have up to two children per family on average; the midlevel countries (up to $25,000 per capita) have up to three children per family; and the poorer countries (less than $15,000 per capita) have up to eight children per family.

Of all these 173 countries, there is just one country that does not fit into any of these groups: Israel, with a per capita GDP of $30,000 and an average of three children per family. Israel stands alone, in a league of its own, somewhere between the United States and Eritrea. It’s not clear which of these directions we’re really aiming for, but it’s quite clear where a continued high birth rate could lead us.

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