ABSTRACT
The major trend dominating Israeli social policy since the 1980s has been to cutback on government welfare spending. The trend toward retrenchment in Israel is fueled by two main forces: economic and ideological. The Israeli experience shows that targeting within broader and universal benefit systems and on the basis of group status criteria, without the means of testing, proved to be more viable than the recourse to means testing and other individual behavioral criteria. Targeting can be achieved in an effective manner through the use of criteria related to demographic or group status, geographic location, claw back, or tax recoup through the direct tax system, and the structure of the benefit system and use of progressive benefit formulas. The major effects of the reform, in addition to extending its benefits to all families with children, were to make the system somewhat more progressive and to enhance its effect on the well-being of most of the large families.
