A new report exposes a grim economic reality for Israel’s self-employed sector: the more a household relies on self-employment income, the higher its risk of falling into poverty. Child poverty among families headed by self-employed workers is 10.5 percentage points higher than among families of salaried employees.
According to a new special study by Dr. Robbie Nathanson, conducted for the Self-Employed Forum of the Histadrut, the data paint a troubling picture of the economic resilience of Israel’s self-employed. The report shows that more than a quarter of households headed by a self-employed individual (26.6%) lived below the poverty line in 2024—a figure that reflects a further deterioration in their economic situation.
Extremely high poverty rates
A steady rise in poverty: Poverty among households headed by a self-employed worker increased by 0.9 percentage points within a year, from 25.7% in 2023 to 26.6% in 2024. This rate is significantly higher than that of households headed by salaried employees, which stands at 22.9%.
The link between self-employment and risk: The data highlight that the greater the household’s reliance on self-employment income, the higher the risk of poverty. When the self-employed person is the main breadwinner (the head of household), the poverty risk is 5–6 percentage points higher than in households where a self-employed person is not the primary earner.
Depth and severity of poverty: Although overall poverty levels remain high, there was a slight improvement in indicators measuring the depth and severity of poverty among self-employed households. The depth of poverty fell from 35.9% to 35.6%, and severity declined from 18.3% to 17.9%. Still, the report stresses that overall poverty levels remain very high.
The children gap: The most alarming figure concerns the next generation. Child poverty among households headed by a self-employed worker stands at 34.1%—a stark gap of 10.5 percentage points compared with children in households headed by salaried employees (23.6%).
Limited effectiveness of government aid: Transfer payments and grants reduce poverty among self-employed households by only about 30%, compared with a reduction of roughly 36% among salaried households. This finding suggests that the social safety net is less effective for the self-employed sector.
'An inadequate safety net'
Self-employed individuals living below the poverty line are typically owners of very small businesses or “solo self-employed” workers (freelancers), often concentrated in sectors with particularly high economic risk. These include hospitality and food services, arts, entertainment and leisure, as well as education and instruction.
Responding to the findings over the weekend, Rami Beja, chair of the Histadrut’s Self-Employed Forum, said: “This report confronts us with a bleak and painful reality that cannot be ignored. A situation in which those who serve as the engine of economic growth face the highest risk of poverty is a disgrace for the State of Israel. After years of upheaval during COVID and an ongoing war that continues to exact a heavy price, Israel’s self-employed feel invisible.
“The safety net the state is supposed to provide simply does not exist—or is inadequate," Beja said. "I call on the Israeli government: the time has come to change course. You cannot continue imposing austerity measures and freezing rights while small businesses are bleeding. In the upcoming state budget, priorities must change, and it must be understood that rehabilitating the self-employed sector is a national interest of the highest order. Without strong self-employed workers, there is no Israeli economy. Do not let the engine of the economy stall. It is time to give us the security we deserve—as a right, not as a favor.”