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Child allowances increase birth among Arabs, haredim
Study shows decision to increase sum granted in monthly child allowances between 1994-2004 led to 6%-7% increase in Arab birthrate, 3% increase in ultra-Orthodox birthrate,
Changes in the sums granted in child allowances during the years 1994-2007 brought about significant changes in birthrates among Arab and ultra-Orthodox women, a study conducted by the Bank of Israel and the National Insurance Institute shows.
According to the study, which examined the correlation between the sums granted in child allowances and the birthrates among women in Israel, the decision to grant a monthly allowance of NIS 500 ($132) for a family's fourth child and NIS 560 ($148) for a family's seventh child increased birthrate in the Arab sector by 6%-7%, and caused a 3% rise in birthrate in the haredi sector compared to a period in which no child allowances were granted.
The issuing of child allowances increased the general birthrate in Israel by 2%, but had no impact whatsoever on the birthrate in the Druze and non-haredi Jewish sectors.
The decision to reduce the child allowance rates between 2004 and 2007 led to a decline in birthrate among Arab woman, as a well as a decline in birthrate for some of the ultra-Orthodox women.
According to the study's composers, if child allowances were to be completely cancelled, this would lead to a decline of 0.2 children per family in the ultra-Orthodox sector - meaning one less child in every fifth family, and a decline of 0.4 children per family in the Bedouin sector - meaning two children less in every fifth family.
However, revoking child allowances would have no effect on the non-haredi Jewish population.
Curbing poverty
Dr. Daniel Gottlieb, head of the National Insurance Institute's research department, told Ynet that according to recent poverty reports, it can be seen that a cut in child allowances deepens the problem of poverty.While the study shows that cuts in child allowances have a powerful impact on the short-term reduction of the size of the Israeli family, "it seems that the short-term effects of allowance cuts are large, but the long-term impact is very minor. Therefore, the overall effect actually increases poverty," Gottlieb said.
Child allowances are a means by which the State grants financial assistance to families in raising their children, and a main tool to help minimize poverty and gaps in income among families with children.
However, the allowances' contribution to reducing poverty at the same time may actually be leading to an increase in birthrates among the poorer populations.
Significant changes have been made in the sum granted in child allowances in Israel in the past two decades: In the mid 1990s, the sum granted to the non-Jewish sectors was raised to match the sums granted to Jews.
In 2001, the allowances for a fifth child or more were raised significantly. In 2002-2003, allowances were dramatically cut and the allowance for the birth of an additional child in 2007 was 60% lower than the same allowance in 2000.
Overall, the sum of money granted in child allowances in 2000 amounted to NIS 8.1 billion ($2.4 billion), and dropped to NIS 5.1 billion ($1.35 billion) in 2008.
The study also showed that the sums granted in the allowances had a stronger impact on the birthrate of older women with low-income households, as well as women coming from large families. A decline in birthrates among these women could be seen following the aforementioned allowance cuts in 2003.
