The Left Behind: Intergenerational Mobility and the Poverty Trap in Israel | Executive Summary

This study was published ahead of the Eli Hurvitz Conference on Economy and Society 2025.

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Introduction

This study is part of a broader research effort aimed at identifying the pathways of economic mobility in Israel. Its focus is on women and men who grew up in economically disadvantaged households and failed to improve their economic standing through the labor market—the “left behind."

Intergenerational mobility describes the link between individuals’ socioeconomic characteristics and those of their parents. Earlier economic research conducted in Israel finds that individual income is highly dependent on parental income, a link that is stronger than in most other developed countries. Furthermore, the research finds substantial variation in intergenerational mobility patterns across and within different population groups (Arabs, ultra-Orthodox (Haredi) Jews, and non-Haredi Jews). Recent research highlights that factors such as parental education, family generational presence in Israel, and geographic location clearly affect the level of mobility. Studies have also shown that Israel’s high-tech industry plays a role in upward mobility: individuals from the lowest income quartile who enter the tech sector are four times more likely to reach the top quartile.

While most research in Israel and worldwide focuses on upward mobility among disadvantaged groups, our study shifts the spotlight to those left behind, i.e., individuals from a modest economic background who do not succeed in climbing up the income ladder. Our objective is to identify the systematic characteristics of this group and ask: Who are the people who are "left behind?" In what environments did they grow up, what education did they receive, and what are the patterns that characterize their employment?

Main Findings

1. In Israel, 37.5% of individuals whose parents were in the bottom income quartile remain in that quartile also when they grow up as adults. This figure is high compared to other developed countries and places Israel close to the United States, the developed country with the most severe economic immobility of people from weak economic backgrounds.
   
   
2. There are large gaps in the likelihood of being left behind between Haredim, Arabs, and non-Haredi Jews. Among non-Haredi Jews, Ashkenazim have 19% lower odds of remaining behind than those of mixed origin, while Mizrahim and FSU immigrants have 10% higher odds.
   
   
3. A substantial portion of this variation between groups is explained by their level of education. Among non-Haredi Jews, education accounts for the full gap between groups of different ethnic origin. Likewise, for non-Haredi Jews (of Ashkenazi origin), differences in education level can account for 60% of the gap with Christian Arabs, 51% of the gap with Muslim Arabs, and 52% of the gap with Haredi.
   
   
4. The differences in the likelihood of being left behind related to level of education can be predicted as early as high school: group-based differences in educational attainment likely begin within the school system, not just in decisions later in life.
   
   
5. Significant disparities exist between graduates from secular and state-religious education from weak economic backgrounds. Women from weak economic backgrounds who graduated from the state-religious system have 1.2 times higher odds of remaining behind; for men, the gap is 1.3. These differences persist even after controlling for demographic characteristics and academic or professional training. Moreover, when comparing people whose high school diplomas are similar (in terms of the number of matriculation (Bagrut) units in English and mathematics), the gaps between graduates of the different educational streams increase.
   
   
6. The Ministry of Education’s Nurture Index is an effective tool to identify schools in which students have a high likelihood of falling behind. A one-decile increase in the Nurture Index correlates with a 6 percentage point decrease in the likelihood of individuals from low-income backgrounds falling behind (15% of the average likelihood across schools), and variation in the Nurture Index explains 37% of the variation in the likelihood of being left behind.
   
   
7. At the municipal level, factors such as the strength of the local labor market, education, geographic proximity to the center of the country, and income correlate strongly with the likelihood of being left behind. Furthermore, we find that children from a low-income background that grow up in heterogeneous communities – surrounded by people with different life circumstances than their own – have a lower chance of being left behind.
   
   
8. The employment patterns of those left behind are marked by instability—frequent exits from the labor market, low job tenure, and income volatility. Both employment status and monthly earnings are strong predictors of being left behind.
   
   

Policy Implications

The findings indicate that schools and environment play a critical role in helping individuals escape the cycle of poverty through the labor market. Variation in the likelihood of being left behind is determined as early as one's school years, underscoring the need for early interventions. We identify a number of indicators that can serve as warning signs—such as the Nurture Index—to help target schools where students from low socioeconomic status face the highest risk of being left behind.

Our analysis also shows that those left behind often work in low-wage jobs or are unemployed. Their low productivity and part-time employment are intertwined. Nonetheless, the findings suggest that even late-stage interventions could provide meaningful improvements in people’s chances of escaping the poverty trap.