Israelis are flocking abroad. This unfortunate figure received further backing this week when a Tel Aviv University study pointed to the largest wave of emigration from Israel in at least the last 15 years. Now it turns out that not only are more Israelis leaving the country, but their profile has also changed. A new report by the Tax Authority reveals that an increasing number of high earners, high-tech employees, doctors, and individuals aged 40 to 50 who are at the peak of their careers are choosing to relocate overseas. The significance for the state is not only demographic, but also economic, as this population bears the lion's share of tax payments.
The study, conducted by Dr. Ariel Greises and Nili Ben-Tovim of the Tax Authority's Planning and Economics Division, examined the income and tax payments of Israelis who emigrated abroad between 2015 and 2024. The data show that over the past six years, emigration trends have changed dramatically. The number of emigrants grew by about 50%, but the more significant change lies in their identity. Since 2022, and even more intensely in 2023 and 2024, the rate of emigration among the affluent population has almost doubled compared to preceding years. The authors of the study note that it cannot be determined with certainty whether the shift stems from the fallout of the coronavirus crisis or from the political and security events since the start of 2023.
The rise in the number of emigrants is only part of the story. While their numbers grew by about half, the volume of tax they paid in the year preceding their departure surged at a much steeper rate. Until 2019, emigrants paid income tax of about half a billion shekels per year. In the last two years, that figure reached approximately NIS 1.2 billion annually. The Tax Authority estimates this represents a potential tax loss of around NIS 700 million for each new cohort of emigrants. If the trend continues, within five years the loss of tax revenue could reach approximately NIS 3.5 billion a year.
The Wealthy Are Leading the Exodus
Leading the trend is the top decile. Its emigration rate rose from about 0.3% to more than 0.5% in 2024, a jump of about 80%, while in the lower deciles there was virtually no change. Members of the top decile currently account for roughly 67% of the total income of emigrants and about 86% of the income tax they paid before leaving Israel. The Tax Authority states that the change in the composition of emigrants, alongside the increased weight of the top decile, is the primary reason for the growth in state tax revenue losses.
The shift is also evident in the age of emigrants. While the proportion of 20- to 30-year-olds choosing to move abroad remained stable over the decade, among those aged 40 to 50 a jump of about 60% was recorded. The share of this age group out of all emigrants rose from 13% a decade ago to roughly 20% today. This is a population that is generally at the peak of its career and earns high incomes. Accordingly, the total income of 40- to 50-year-olds prior to emigration tripled, from about NIS 900 million a year to approximately NIS 2.7 billion.
The picture is similar when broken down by employment sector. The number of people moving abroad from the high-tech sector grew by about 150%, and the number of emigrants from the healthcare sector more than doubled. In contrast, in sectors where wages are lower, such as education and manufacturing, almost no change was recorded. While in the past the income of emigrants was similar to the average national wage, today it is about 50% higher, a figure that reinforces the conclusion that those choosing to leave Israel in recent years are primarily high earners.
Alongside Israelis choosing not to live here, it appears their money is also making its way out. In 2023 and 2024, the number of Israelis reporting the transfer of more than half a million shekels out of the country doubled, and among emigrants a fourfold surge was recorded. Although this mainly involves self-employed individuals and high earners, and there is no information on the exact amount of funds transferred, the Tax Authority estimates that the trend may indicate an attempt by some Israelis to diversify risks by holding a larger portion of their assets outside Israel.
If this trend continues, the implications could extend far beyond the loss of hundreds of millions of shekels a year in taxes. The strong socio-economic strata in the economy are the ones that establish companies, invest, create jobs, and pay the majority of taxes. As a larger share of them chooses to relocate abroad, the growth base and the state's ability to fund public services are gradually damaged. Countries that experienced prolonged emigration of strong and educated populations over the years, including Lebanon, struggled to maintain economic resilience. However, in Lebanon's case, emigration was only one of several factors in the crisis, alongside financial collapse, deep-seated corruption, and a ongoing political crisis.