Local Authority Budgets Deepen Educational Inequality in Israel

A new study led by Prof. Iris BenDavid-Hadar and Dr. Ruth Meoded of Bar-Ilan University’s Faculty of Education sheds light on one of the most pressing challenges facing Israel’s education system: structural inequality in per-student funding.

The findings show that although Israel’s Ministry of Education operates a “differential funding” model, allocating greater resources to students from lower socioeconomic backgrounds, disparities on the ground continue to widen. One of the primary reasons is the independent funding that local authorities contribute to their schools.

Survival vs. Excellence: A Divide in Priorities

The study identifies a dramatic difference in educational priorities stemming from the financial capacity of individual local authorities. In affluent and well-resourced municipalities, local funding is directed toward advanced educational development, including specialized academic tracks, excellence and gifted programs, innovative learning environments, and intensive preparation for military service and the labor market.

In disadvantaged municipalities, however, the picture is entirely different.

Heads of education departments in lower socioeconomic clusters told the researchers that their limited municipal budgets are first and foremost devoted to basic needs. Funds are used to repair safety hazards and essential infrastructure, provide meals for students, offer emotional and psychological support, and subsidize tutoring for families unable to afford the additional costs associated with matriculation exams. Under these circumstances, few resources remain for educational innovation.

The Proposed Solution: Reforming the Funding Model and Limiting Additional Spending by Wealthier Municipalities

Prof. BenDavid-Hadar, a senior faculty member at Bar-Ilan University, a board member of the U.S. National Academy for Education Finance, and an advisor to the World Education Council, warns against the growing trend toward decentralizing authority to local governments. She argues that transferring additional power to municipalities without first addressing disparities in funding will not solve the system’s problems, but rather intensify them.

The research team proposes an alternative model that would require a significant policy decision by the state. First, the funding formula should be revised so that the economic position of each local authority carries substantially greater weight, compensating disadvantaged municipalities for their limited ability to generate additional revenue.

Second, and most notably, the researchers call for limits on the amount wealthy local authorities are permitted to add to the budgets of their educational institutions. In their view, allowing a municipality to double or triple the funding provided by the state effectively creates two different education systems under a single national framework.

A Question of Values, Not Only Economics

The central conclusion reached by Prof. BenDavid-Hadar and Dr. Meoded is that educational inequality in Israel is not an inevitable consequence of geography. It is the direct result of policy choices.

A reality in which affluent municipalities are able to surge ahead while disadvantaged ones struggle to meet basic needs reflects a choice about values and priorities. To bring about meaningful change, the Bar-Ilan researchers emphasize, the state must decide what kind of education system it seeks to build: one that is increasingly competitive and privatized, or one that genuinely guarantees equal opportunity for every child in Israel.

Bar-Ilan University wishes all of Israel’s students a successful school year. :)