Interregional inequalities in Israel: Explanatory model and empirical data

Abstract

An explanatory model of regional inequality is proposed, which attempts to explain a spatial distribution of different income groups. According to this model, such a distribution is a function of the relation between the cost of living in a particular geographic area and actual income of its inhabitants. The applicability of this model to spatial inequalities in Israel is investigated, using data from five subsequent censuses of population and housing. The analysis indicates that there is no universal trend in the development of inequalities, examined from either a temporal or a spatial point of view. Instead, the extent of interregional disparities appears to differ when various indicators of inequality are considered. Measures of population distribution and wealth indicate the highest extent of interregional disparities, whilst the country's regional development appears to be the least uneven when indicators of education and participation in the labor force are considered. Temporally, most indicators of welfare and population distribution tend to diverge over time, reflecting increasing interregional disparities. In contrast, variables related to education and housing tend to converge, indicating a reduction in inequality. Moreover, the change in inequality appears to differ across various geographic areas: Whereas development in the central part of Israel has tended to become more uniform over time, the country's peripheral regions have developed towards further polarization of their socio-economic development. As a result of the analysis, several strategies are proposed aimed at reducing the extent of interregional disparities.