The High Cost of Housing

Eitan Bluer 

One of the most significant expenditures per household in Israel’s major cities is the expense of housing. The average Jerusalem household spent about NIS 3,650 monthly on housing in 2011; this amount constituted about 28% of all household expenses. The percentage of expenditures that went towards housing in Jerusalem was higher than the average for Israel (where 25% of total household expenditures was spent on housing) and Haifa (22%), but lower than the figure for Tel Aviv (31%). In recent years there has been a steady increase in household expenditures for housing. In the last five years, housing costs for Jerusalem households increased by 44%, from an average cost of NIS 2,537 per month in 2006 to NIS 3,648 per month in 2011. The rate of increase in Jerusalem (44%) was lower than the figure for Israel – where housing expenditures rose by 47% during the same period – and higher than the figure for Tel Aviv (41%) and Haifa (36%). 

The supply of apartments, as well as their size and number of rooms, also affects the expense of housing for renters. In 2011 the average monthly expense for renting an apartment in Jerusalem was NIS 2,613 for a 2.9-room apartment. That is, the average cost per room was NIS 901 per month. This price is higher than the average for Israel (NIS 837 per room), Haifa (NIS 626), and Be’er Sheva (NIS 380) but lower than the figure for Tel Aviv (NIS 1,420), Ramat Gan (NIS 1,120), and Rishon LeZion (NIS 985). 

An examination of the average cost per room as valued for homeowners’ apartments reveals the discrepancy in pricing between cities in the center of the country and in the periphery. The average value of an apartment in Jerusalem for the homeowner in 2011 was NIS 1,727,000 for an apartment with an average of 3.9 rooms (NIS 442,820 per room). The cost per average room in Jerusalem was higher than the figure for Israel (NIS 345,365 per room), Haifa (NIS 293,846), Be’er Sheva (NIS 205,609), and Rishon LeZion (NIS 379, 047), yet lower than the figure for Ramat Gan (NIS 532,571) and Tel Aviv (NIS 647,297). 

Source: Press Release for 2011 Survey of Expenses, Central Bureau of Statistics 

Inter-Generational Education

Eitan Bluer

It is often said that the dream of every Jewish mother is for her children to acquire an education. Yet as it turns out, parental expectations regarding higher education vary, depending on the parents’ own level of education. Evidently, the higher the parents’ level of education, the greater their expectation that their own children will acquire a higher education. In 2011 about 68% of Jerusalem’s parents age 20 and above who had up to 12 years of education (no high school diploma) indicated that they expect their children to earn an academic or other tertiary (post-secondary) degree from an accredited institution. This figure was 75% among parents with a high school diploma, and 80% among parents with a tertiary education. Within Israel as a whole the figures were higher. About 77% of parents with fewer than 12 years of education (no high school diploma) indicated that they expect their children to earn an academic or other tertiary degree. The figures were comparable for parents with a high school diploma (84%) and parents with a tertiary education (85%).

And what about fulfilling the expectations? We would expect to see a positive correlation between the mothers’ and children’s levels of education as well as educational mobility. In 2011, approximately 64% of all Jerusalemites age 20 and above indicated that their mother’s education did not exceed 12 years. In contrast, 25% indicated that their mother had a tertiary education. Among children whose mothers have twelve or fewer years of education, 29% reported having a tertiary education. Among children whose mothers have a tertiary education, this figure stood at 51%.

Regarding educational mobility, it appears that the percentage of children whose level of education exceeds that of their parents is lower for Jerusalem than for Israel. In Jerusalem, 58% of children whose mothers have a secondary education indicated that their own level of education exceeds that of their mothers, whereas for Israel this figure stood at 65%. 

Source: 2011 social survey of the Central Bureau of Statistics

Students and the City

Eitan Bluer

In recent years the Municipality of Jerusalem and the Jerusalem Development Authority have been making great efforts to attract students to the city, to study and to settle down and live in Jerusalem upon completion of their studies. The number of students enrolled in institutions for higher education in Jerusalem has been increasing over the years. During 2010-2011 approximately 36,500 students studied in Jerusalem, constituting 15% of all the students in Israel, an increase of 3% over 2009-2010, when 35,600 students studied in Jerusalem, and an increase of 26% over 1999-2000. The Hebrew University of Jerusalem is the higher education institution with the greatest number of students in the city. This number stood at 20,400 in 2010-2011 and constituted 56% of all the students in higher education institutions in Jerusalem. A total of 10,800 studied at academic colleges in the city (30%), and 5,300 at teacher-training colleges (14%). Of all the students enrolled in higher education institutions in Jerusalem during 2010-2011, 34% resided in the city, 6% resided in other localities within the Jerusalem District, 18% resided in the Central District, 12% in the Judea and Samaria District, 9% in the Tel Aviv District, 5% in the Haifa District, and the rest (15%) in the northern and southern peripheries.

The students who reside in Jerusalem can be divided on the basis of whether they attend higher education institutions within the city or outside of the city. The number of students who resided in Jerusalem in 2010-2011 measured 22,100. Of these, 12,300 students resided and studied in Jerusalem, while the rest (9,800 students residing in Jerusalem) attended higher education institutions outside of Jerusalem. Bachelor’s degree (first degree) students who resided in Jerusalem tended towards the humanities more than the general population of students in the country. The percentage of students who resided in Jerusalem during 2010-2011 and studied subjects within the humanities measured 36%, higher than the percentage for Israel (26%). In contrast, the percentage of students who resided in Jerusalem and studied subjects within the social sciences (27%) was lower than the average for Israel (34%). 

Source: Analysis of data from the Central Bureau of Statistics

In Jerusalem Women Earn More

Eitan Bluer

Jerusalem’s job market is characterized by large salary discrepancies among the various population groups. In addition, there are large discrepancies in the rate of participation in the workforce among the various groups. Relatively low rates of participation in the workforce are found among haredi (ultra-orthodox) men and among Arab women. These characteristics have created a unique phenomenon in Jerusalem, with a relatively low gap between the average monthly salaries of men and of women, but a large gap in their average number of work hours. In 2010 the average (gross) monthly salary of an employee in Jerusalem was NIS 7,300, which was lower than the figures for Tel Aviv (NIS 10,200) and Israel (NIS 8,600). An in-depth analysis of salary by gender indicates a gap of 29% between the average (gross) monthly salary of men in Jerusalem (NIS 8,100) and that of women (NIS 6,300). This gap was lower than the figures for Tel Aviv and Israel, where the average salary of men was higher than that of women by 51%.

The opposite pattern exists with respect to the gap between the number of average weekly work hours of men and that of women. The average number of weekly work hours of men in Jerusalem (44 hours per week) was higher than that of women (33 hours per week) by 33%. This gap was higher than the figure for Tel Aviv, where the average number of weekly work hours of men was higher than the figure for women by 13%. In Israel the gap was 25%.

These two phenomena have created a situation in which the average (gross) hourly wage of women in Jerusalem (NIS 43) was higher than that of men (NIS 41) by 5%. This differs from the situation in Israel, where the average hourly wage of women (NIS 43) was lower than that of men (NIS 51) by 16%, and in Tel Aviv, where the average hourly wage of women (NIS 50) was lower than that of men (NIS 59) by 15%. 

Data source: Income Survey 2012, Central Bureau of Statistics

Aliyah to Jerusalem

Eitan Bluer 

Ever since the State of Israel was founded, aliyah (Jewish immigration) to Israel has been regarded as one of the significant symbols of the state’s independence. Jerusalem, as the center of the Jewish world, constituted a source of attraction for new immigrants from around the world. During the past decade, the percentage of new immigrants who settled in Jerusalem, out of all immigrants to Israel, has very much increased. In 2011, a total of 2,200 new immigrants, accounting for 13% of all immigrants to Israel, settled in Jerusalem as their first place of residence. The number of immigrants who settled in Jerusalem in 2011 was higher than the numbers for Tel Aviv – 800 (5%) – and Haifa – 1,200 (7%). 

Jerusalem has less power of attraction for immigrants with limited resources. During the 1990s, therefore, when large numbers of immigrants arrived from former Soviet states, only 7% of all the immigrants to Israel chose to settle in Jerusalem. The changing characteristics of immigrants to Israel, and in particular the increase in percentage of immigrants from wealthy states (especially the United States and Western Europe) contributed to a significant increase since 2002 in the percentage of immigrants who choose Jerusalem as their first place of residence in Israel. In 2011, 36% of immigrants who settled in Jerusalem came from the United States, 20% from France, and only 12% from Russia. 

The socio-economic characteristics of immigrants who arrived during the 1990s and of those who arrived during the 2000s have influenced their choice of neighborhood. The preferred neighborhoods among immigrants who settled in Jerusalem during the 1990s were Pisgat Ze’ev, where immigrants who arrived during the 1990s accounted for 17% of the population, Neve Ya’akov (15%), and the French Hill (14%). In contrast, the preferred neighborhoods among immigrants who arrived during the first decade of the 2000s, most of whom came from the United States and France, were Talbiyeh, where new immigrants accounted for 14% of the population, the city center (14%), and Rehavia (13%). 

Sources: Press Release: “Immigrants to Jerusalem,” the Central Bureau of Statistics and the 2012 Statistical Yearbook of the Jerusalem Institute for Israel Studies 

Ever-Shrinking Earnings

Eitan Bluer

The level of household income provides a basis for various indices that can be used to measure conditions within cities, including poverty level, socio-economic standing of cities, and so on. The level of household income can also explain why in recent years more and more households with at least one wage earner are unable to break out of the cycle of poverty.

In 2010 Jerusalem had about 194,000 households, of which in approximately 60% the head of household was employed. The average net monthly household income in Jerusalem was NIS 10,700. This figure was 23% lower than the average monthly income per household in Israel (NIS 13,900), 28% lower than the average monthly income in Tel Aviv (NIS 14,800), and 24% lower than the average monthly income in Haifa (NIS 14,100). The principal source for the gross monthly income of Jerusalem households whose head of household was employed was earnings from employment (85%). The other sources of income included capital, property, pensions, social security benefits, and so on. Interestingly, social security benefits constituted 8% of all income in those households headed by salaried employees. This percentage was higher than the figure for Israel (6%), Tel Aviv (4%), and Haifa (5%).

The average household size varies significantly among the major cities. It is important, therefore, to measure the level of income per number of individuals in the households (income per standard person). Jerusalem is characterized by households with a high average number of persons (4.3 persons) compared to Tel Aviv (2.5 persons) and Israel (3.7 persons). A weighted assessment of these statistics reveals that in 2010 the average net monthly income in Jerusalem per standard person measured NIS 3,300. This was 30% lower than the average income for Israel (NIS 4,700), 50% lower than the average for Tel Aviv (NIS 6,600), and 42% lower than the average for Haifa (NIS 5,700). 

Source: Central Bureau of Statistics, Income Survey for 2010