Demography In Israel: You Get More Of What You Pay For
November 08, 2011, 08:13 PM
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Here's a good article in Slate by Gershom Gorenberg on how Israeli government subsidies have created so many ultra-Orthodox men who don't work, don't soldier, but do father many children. The author feels this is disastrous for the Israeli economy, but, overall, the Israeli economy is doing pretty well, although rapid Jewish population growth in Israel has caused land prices to skyrocket.

What's not included is the "bleed-off rate" of what % of ultra-orthodox leave the lifestyle and become tax-paying workers.

In general, the Israeli government is pretty good at manipulating population dynamics to bring about favored outcomes. For decades you heard that Israel was doomed because Israeli Jewish fertility is too low. Well, guess what? It has gone up. Now you hear a lot of complaints from secular Jewish Israelis that the fertility is too high among the wrong kind of Israeli Jews.

Well, the Israeli government created that high ultra-Orthodox fertility by turning on the financial spigot, and I don't think it's all that far-fetched that at some point they'll turn off the welfare gravy train for the ultra-Orthodox.

The point is that in Israel, very smart people are encouraged to publicly discuss these kinds of population issues so that appropriate steps can be taken, whereas in the U.S., anybody who brings up these topics is demonized. Can you imagine Slate running an article complaining about the high fertility of illegal immigrants in the U.S.?

A decade ago, for instance, demographer Hans P. Johnson of the super-respected Public Policy Institute of California pointed out that the 1986 amnesty law created a major Hispanic baby boom in California from 1988-1994, which had sizable consequences for the state. But who, besides me, every pointed this out, even when amnesty and guest workers were the hot topics in Washington in 2004, 2006, and 2007? It just not done. (But it is in Israel.)