Remarks by Angel Gurría,
Tel Aviv, 31 January 2016
(As prepared for delivery)
Minister Gabai, Ladies and Gentlemen,
I am delighted to be in Tel Aviv to launch this report on well-being, in a country that has put well-being at the heart of policymaking. In this area you have led by example.
In December 2012, the Israeli government adopted a resolution to develop indicators on well-being, sustainability and national resilience beyond GDP. The programme is ambitious and innovative in its approach, with agencies looking beyond their own sectors, to understand how measuring well-being can help “join up” policies.
The OECD has supported and informed this process, which is consistent with our own focus on measuring and promoting multi-dimensional well-being through our Better Life Initiative, our New Approaches to Economic Challenges Initiative (NAEC) and our Inclusive Growth Initiative. It is also in line with the aims of the Sustainable Development Goals agreed by the international community last September.
The report that we are launching today, “Measuring and Assessing Well-being in Israel”, complements the Israeli government programme by providing an international baseline that compares Israel's performance with that of other OECD countries across the 11 dimensions of the OECD's well-being framework.
By looking at a single country under the microscope we can hone in on the fine details: we can describe the level and distribution of well-being in Israel, but also go beyond this to look at the sustainability of well-being over time, how well-being measures can be used to inform policy, and to identify the key data gaps associated with measuring well-being in Israel.
Let me provide you with some of the key highlights from the report, which present a mixed picture:
Israel is among the top performers in the OECD in a number of key dimensions of well-being. People’s satisfaction with their life, their health status and educational attainment are all well above the OECD average.
In other areas, however, Israel does not perform so well: income poverty, housing conditions and air quality are below the OECD average.
If we dig deeper, we also observe some contrasting results within individual well-being dimensions. Take education, for example. School completion and attainment in upper-secondary and tertiary education are quite high in Israel, but this contrasts with relatively low learning outcomes in lower-secondary education, as measured by our PISA programme.
If we unfold this, it suggests that while Israel does well in keeping its best students in lower-secondary schools engaged in further education, many of those with poorer educational outcomes at age 15 are left behind. This is not just bad for equity; it also deprives the country of skills and talent that could drive growth in the future.
Average measures, such as the ones I’ve just cited, give only a partial picture of well-being conditions. Assessing people’s well-being requires looking at differences between population groups. And, in this respect, Israel, as a highly diverse society, faces distinct challenges.
Differences in well-being are large between the Jewish and the Arab population, and also within each of these groups. Arabs are unambiguously disadvantaged across all dimensions of well-being for which measures are available. They experience higher rates of income poverty, lower labour force participation, lower educational attainment and lower health status.
These multiple disadvantages are mutually reinforcing, with low education leading to poor or no jobs, lower health indicators, high poverty and so on, in a vicious circle. Haredi Jews share these disadvantages, although they report much higher levels of life satisfaction, better housing and health status than the Arab population.
Our report highlights an interesting finding on what drives this subjective well-being across population groups in Israel. Incomes and jobs are important for both Arab Israelis and secular Jews, while they are much less important for Haredi Jews. This suggests that raising economic outcomes for the Haredi to the level of secular Jews will be a huge challenge, as these gaps reflect deeply held beliefs. In contrast, addressing the economic causes of poor well-being outcomes for the Arab population should lead to a faster convergence in their subjective well-being.
The report also looks at the sustainability of well-being over time. Well-being has to be built into the system, so that future generations in Israel enjoy the same standards of well-being as today’s.
Sustaining well-being outcomes over time requires preserving four types of resources, or capital stocks, as we call them:
It is by safeguarding and promoting all of these capital stocks that Israel will be able to sustain well-being. And, again, our analysis presents a mixed picture.
While compared to other OECD countries Israel may have relatively low levels of economic capital per capita, this stock has been steadily increasing over time. Unlike in most OECD countries, in Israel the 2008 financial crisis had relatively little impact on the stock of economic capital or its rate of growth.
With respect to natural capital: carbon emissions per capita are relatively low and fresh water extractions have been significantly reduced, but Israel's biodiversity is under increasing pressure.
Israel clearly needs to boost its human capital, which is much lower than the OECD average due to low labour market participation among Arabs and Haredi Jews.
With respect to social capital, levels of trust in others and confidence in the national government are relatively high in Israel, while high levels of perceived corruption are a cause for concern.
The OECD works in all these areas. In fact, we have been providing policy advice to Israel for years now through publications relevant to social cohesion, such as OECD Reviews of Labour Market and Social Policies (2010 and 2013).
The OECD is indeed well placed to help Israel ensure a broad-based policy response that promotes well-being in the here and now, but also makes it sustainable in the long-term.
Minister, Ladies and Gentlemen,
Congratulations for being among the vanguard of countries and officials who are leading the way! For showing that progress is not just about numbers, but about empowering people, about fulfilling people’s aspirations, about inspiring people.
Notwithstanding these achievements, there is no room for complacency. Israel needs to keep strengthening its efforts to promote well-being for ALL! And the OECD is ready to help. We are going to keep working closely with you over the coming years as the national programme for greater social cohesion here in Israel moves into its implementation phase. I hope that our report will be useful to that end.
At the OECD, we have called 2016 ‘The Year of Implementation’. So let’s keep the conversation going, let’s keep the momentum, as we design, develop and deliver, better policies for better lives.