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A man standing at a vegtable stand at the Mahane Yehuda market in Jerusalem, January 24, 2018. (photo credit: Liba Farkash/Flash90)
Even before the current campaign, the Bank of Israel said in February that geopolitical uncertainty had resurfaced amid the prospect of a confrontation with Iran.
As Israelis move between missile alerts, protected rooms, and another week of war with Iran, a study from the Shoresh Institution suggests that the country’s social gaps look starker when measured not only by income, but by what households can actually afford in daily life – especially food, housing, and transportation.
The timing is hard to ignore. Even before the current campaign, the Bank of Israel said in February that geopolitical uncertainty had resurfaced amid the prospect of a confrontation with Iran, and that Israel’s risk premium had increased slightly. During the war itself, the Home Front Command has repeatedly stressed that civilians must continue following life-saving shelter instructions under ongoing missile fire.
The study, published Tuesday by Shoresh researcher Yoav Tuvia, argues that standard measures of inequality tell only part of the story. The Gini coefficient for disposable income – a common measure of inequality – fell from 36% in 2003 to 33% in 2023, while inequality in total consumption declined from 28% to 26%. But when the study looks at basic needs, the picture becomes less reassuring: the gaps between lower- and higher-income households remain wide, and in some cases have grown over the past two decades.
That distinction matters in wartime. Income figures do not always show how financially exposed a household really is, especially if families are relying on savings, debt, or unreported income to get by. The Shoresh study notes that lower-income households in the bottom two income groups appeared to consume more than their reported disposable income, which it says may partly reflect underreporting.
At the same time, a March 2026 Bank of Israel release said household debt had risen to about NIS 903 billion in the fourth quarter of 2025, including about NIS 653b. in housing debt. In practice, that means a family’s ability to withstand an emergency may depend less on its reported income than on whether it can keep paying rent, get to work, and manage rising living costs.
An Arab guard at the entrance to a Shupersal grocery store in the northern Israeli city of Karmiel, on November 8, 2017. (credit: HADAS PARUSH/FLASH90)
Food is one of the clearest examples. The study found that the gap in per-capita food spending between households near the top and bottom of the distribution widened from 5.2-to-1 in 2003 to 5.8-to-1 in 2023. In other words, households near the top spent nearly six times as much per person on food as those near the bottom. The study also found differences in the kind of food people spend money on: eating out makes up a much larger share of food spending among wealthier households, while poorer households devote more of their food budget to meat, poultry, and fish.
The study goes further, arguing that most major food categories function as necessities rather than luxuries. Spending on basics such as bread, grains, oils, dairy products, eggs, and fresh produce rises more with family size than with income, suggesting these are items households are especially reluctant to cut. That gives the wartime context added significance: when daily routines are disrupted, work is unstable, and mobility is limited, the strain is likely to fall hardest on families already living closest to the edge.
Housing tells a similar story. Shoresh found that spending gaps widened over time, and that renters in the bottom income group spent an average of NIS 858 per person on housing, compared with NIS 1,984 in the top group. Homeownership was also more common among better-off households: 76% in the top income group, compared with 63% in the bottom one. Among adults aged 25 to 34, the homeownership rate fell sharply, from 40% in 2003 to 21% in 2018.
The study also points to crowding as a major quality-of-life gap. Households in the bottom income group averaged 1.2 people per room, compared with 0.6 in the top income group. Housing density was even higher among haredi (ultra-Orthodox) and Arab households than among non-haredi Jewish households. In a country once again spending long stretches under alert, those are not abstract numbers; they reflect the very different physical conditions in which Israelis are being asked to endure disruption, work from home where possible, care for children, and seek shelter safely.
Transportation showed the widest gaps of the three main categories the study examined. Although disparities narrowed somewhat over time, the gap remained very large. In 2018, only 42% of households in the bottom income group owned a vehicle, up from 24% in 2003, compared with about 92% in the top income group. In normal times, that shapes access to work and services. In wartime, it may also affect how easily families can evacuate, reach jobs in different areas, or cope with disruptions to routine.
The wider economic backdrop reinforces the study’s message. In its 2024 annual report, the Bank of Israel said the war had significantly affected economic activity, citing supply constraints and the particular burden on young working families. It also said in February that renewed confrontation risk with Iran had raised uncertainty again. Against that backdrop, the Shoresh findings read less like a retrospective on inequality and more like a warning about how unevenly wartime pressure is likely to be felt.
Prof. Ayal Kimhi, vice president of the Shoresh Institution, said headline income figures can obscure what households are actually able to sustain in everyday life. The study’s broader argument is that longstanding gaps in education, labor productivity, workforce participation, and opportunity still shape who can secure adequate food, stable housing, and reliable transportation. In other words, even where income inequality has improved on paper, the basics of daily life remain far less equal.
Under current wartime conditions, that gap may become more visible, not less. Sirens and missile alerts affect nearly everyone, but they do not land on equal ground. A household with more space, more savings, a car, and greater flexibility will absorb disruption differently from one already dealing with crowded housing, thinner food budgets, and limited mobility. Shoresh’s data suggest that if the Iran war deepens the economic strain on Israeli civilians, it will do so on top of inequalities that income figures alone do not fully capture.
