Differential Budgeting of Education to Compensate for Socio-Economic Disadvantage

Years of Activity: 2014

Research Status:


The Ministry of Education, with the support of the entire government, has a long-lasting commitment to equal opportunity in education, and reducing the gaps deriving from socio-economic deprivation or ethnic background. It recognizes that achieving this goal requires differential funding to meet the needs of socially and economically disadvantaged students. This approach was explicitly formulated in the recommendations of the Shoshani and Dovrat committees and in the various funding formulas that the ministry adopted over the years. But the results are still far from adequate. There is some progressivity in the Ministry’s funding of teaching hours for elementary and junior high schools, but almost none in funding high schools or kindergartens; and when additional school funding provided by local governments is factored the situation is worse. The data are far from clear—and this is part of the problem—but it appears that in parts of the system funding patterns may actually be regressive, with fewer resources invested in the education of children from disadvantaged backgrounds.

The Van Leer Jerusalem Institute and the Israel Democracy Institute have convened a team of experts to consider why previous efforts to implement differential funding were less than successful; and what can be done to promote greater success in the future. A joint paper to be discussed at the Eli Hurvitz Conference on Economy and Society in November 2014 examines the theoretical basis for affirmative action in funding education; identifies the factors that have delayed its implementation in the past; describes the existing situation; and proposes a set of guiding principles for future efforts. These include adopting a transparent student-based budgeting system with socioeconomic loadings; setting measurable goals for narrowing socio-economic gaps in schooling; developing policy interventions that recognize the impact of the socio-economic environment on educational achievement; and explicitly addressing the political issues and bureaucratic obstacles that have stymied implementation of differential budgeting in the past.

Team members

Nahum Balas, Taub Center for Social Policy Studies in Israel

Rabbi Gershon Binet, Department of Ultra-Orthodox Education, Jerusalem Municipality

Prof. Momi Dahan, Hebrew University of Jerusalem and the Israel Democracy Institute

Noa Heimann, Budget Department, Ministry of Finance

Eli Horowitz, Trump Foundation

Prof. Moshe Justman, Ben-Gurion University of the Negev and the Van Leer Jerusalem Institute, Chair

Meir Kraus, Jerusalem Institute for Israel Studies

Dr. Sami Mi’ari, Tel Aviv University and Israel Democracy Institute

Dudi Mizrahi, Ministry of Education

Michal Shinwell, National Economic Council, Prime Minister’s Office

Noam Zussman, Bank of Israel