From the Midwest to the Middle East

From the Midwest to the Middle East


Episode 139: Challenges Facing the Israeli Economy

July 17, 2025

Last Updated 1 hour ago

In this conversation, Professor Dan Ben-David discusses the historical and contemporary socioeconomic challenges facing Israel, particularly focusing on the impact of the 1970s on the country’s growth trajectory. He emphasizes the urgent need for educational reform to address the disparities in the education system and the potential risks of a ‘spiral of collapse’ due to skilled emigration. Ben-David advocates for a comprehensive overhaul of the education system to ensure that all children, regardless of their background, receive the necessary skills to thrive in a modern economy.

Takeaways
  • Israel was on a rapid growth path until the 1970s.
  • The Yom Kippur War shifted national priorities away from growth.
  • Current education levels in Israel are comparable to third world countries.
  • Half of Israeli children are receiving inadequate education.
  • The gap between skilled and unskilled labor is widening in Israel.
  • A small percentage of the population pays a large portion of taxes.
  • Emigration of skilled professionals poses a risk to Israel’s future.
  • The education system needs a complete overhaul to be effective.
  • Demographic changes are impacting the socioeconomic landscape.
  • A focus on education can help bridge the gap and improve the economy.

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