Prof. Daniel Gottlieb* Deputy Director General of Research and Planning at the

National Insurance Institute of Israel

Poverty & Disability

National & International Perspectives

12.12.2016

Thanks for great help to Ofir Pinto, Miri Endeweld , Oren Heller, Natalia Gitelson and Rivka Prior

Population: about 8.5 million

Working-age population: about 5 million

Rate of people with disabilities at working-age: 24.7%

Rate of disability allowances recipients at working-age : 5.5%

Israel in Numbers

Poverty Measures Poverty line (z):

Half median net cash household income,

adjusted for family size

Poverty rate (Headcount):

H = 𝑞

𝑁 , q = # of households living in poverty, N = total # of Hh’s

Poverty severity (FGT):

q

FGT (yi, z, δ) = (1/N ) ∑giδ

i=1

gi=income gap of Hhi = (z-yi)/z, yi = net income of Hhi = earnings + benefits + pensions, δ = inequality aversion (of social planner)

Poverty Rate: General households vs. Households with disabilities

Source: Analysis of Household Expenditure Survey, 2014

10.0%

15.0%

20.0%

25.0%

30.0%

2002 2004 2006 2008 2010 2012 2014

All households Household with PWD

People with Disabilities by Impairments

Source: Analysis of Administrative Data, 2014

Mental 34%

Intellectual 10%

Visual 5%

Hearing 2%

Motor 8%

Neurological 13%

Internal 27%

Other 1%

235,000 recipients

Deviation from Poverty Rate by Impairment

Source: Analysis of Administrative Data, 2014

-40.0

-30.0

-20.0

-10.0

-

10.0

20.0

30.0

40.0

50.0

Deviation from Poverty Rate by Impairment (2 income definitions)

-40.0

-30.0

-20.0

-10.0

-

10.0

20.0

30.0

40.0

50.0

Total Income

Income without Long-Term Care Allowances

Poverty Severity: General households vs. Households with Disabilities

Source: Analysis of Household Expenditure Survey, 2014

-

0.0050

0.0100

0.0150

0.0200

0.0250

0.0300

0.0350

0.0400

0.0450

0.0500

2002 2004 2006 2008 2010 2012 2014

All households Household with PWD

Household Structure?

Size of Disability Allowances?

Employment?

Salary size?

Education?

Causes of Poverty

Live Alone: General Households vs Households with Disabilities

Source: Analysis of Administrative Data, 2014

44.1%

52.9%

40.0%

43.0%

46.0%

49.0%

52.0%

55.0%

Alone

All Households Household with PWD

Poverty Rate: Live Alone vs. Not Alone

Source: Analysis of Household Expenditure Survey, 2014

17.3%

22.0% 22.6%

32.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Not alone Alone

All Households Household with PWD

Deviation from Poverty Rate by Severity of Disability

Source: Analysis of Administrative Data, 2014

-80.0

-60.0

-40.0

-20.0

-

20.0

40.0

60.0

80.0

40 50 60 70 80 90 100

Deviation from Poverty Rate

Severity of Disability

Amount of Monthly Disability Allowances

Source: Analysis of Administrative Data, 2014

4,863

3,829

3,326 3,174 3,110 3,027 2,815 2,743

-

1,000

2,000

3,000

4,000

5,000

3,364

Employment Rate: Population vs. Disability Allowance Recipients

59.8 60.3 60.6 61.0 61.7 62.0 62.1 62.6 62.6 63.6 63.7 64.2

12.7 13.0 14.0 14.5 15.7 16.5 16.8 18.2 19.2 20.1 20.6 21.4

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Population Disability Alowance Recipients

Sources: (1) Labor Force Analysis; (2) Analysis of Administrative Data, 2014

% Change in Employment Rates: Population vs. Disability

Allowance Recipients

Sources: (1) Labor Force Analysis; (2) Analysis of Administrative Data, 2014

107%

100%

169%

100%

120%

140%

160%

180%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Population Disability Alowance Recipients

Employment Rate by Impairments

Source: Analysis of Administrative Data, 2014

29.8

23.5 21.5

20.3 19.8 18.7

16.4 16.3

-

5.0

10.0

15.0

20.0

25.0

30.0

21.4

Employment Rate by Impairments: 2003-2014

5.0

10.0

15.0

20.0

25.0

30.0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Average Mental Intellectual Visual Hearing

Motor Neurological Internal Other

Laron's Law

Source: Analysis of Administrative Data, 2014

Average Salaries by Impairments

3,523 3,444 3,360 3,321 3,227 2,904

2,618 2,291

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2,990

Source: Analysis of Administrative Data, 2014

Correlation between relative poverty ratio and income

-

1,000

2,000

3,000

4,000

5,000

6,000

-40.0 -30.0 -20.0 -10.0 - 10.0 20.0 30.0 40.0 50.0 60.0

allowances

salary

Without Matriculation Certificate: Population vs. Disability

Allowance Recipients

36%

61%

0%

10%

20%

30%

40%

50%

60%

70%

All Population Disability Allowance Recipients

Source: Naon et al (2012). People with Disabilities in Israel's Working-age Population: Prevalence, Characteristics and Employment Status.

Without Matriculation Certificate by Impairments

Source: Naon et al (2012). People with Disabilities in Israel's Working-age Population: Prevalence, Characteristics and Employment Status.

61%

72%

64% 61% 60%

56%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Intellectual Mental Visual Other Hearing

Poverty incidence of PWD is higher than for the general poor, but poverty severity

tends to be less for them.

PWD are more likely to live alone and lonely people have higher poverty rate than others.

The poverty rates vary, based on the type of impairment. They are highest for the intellectually impaired and lowest for the neurologically impaired.

If we exclude ‘functioning-benefits’ (fb, no substitution) in the PWD’s income definition then ranking changes, but if fb are really cost refunds then ranking changes.

The more severe the disability, the greater is the amount of benefits and the lower is the likelihood of being poor.

PWD work less and are less educated, but their employment ratio increases faster.

The Laron reform seems to have improved earnings for the Hearing-impaired.

Conclusion

Thank You!

danielgt@nioi.gov.il