A number of problems, particularly economic and educational problems, are more prevalent in development areas, many of which are also located in peripheral areas. Many professionals we interviewed identified the greater disadvantage of young people living in the periphery as a major issue influencing the well-being of children in Israel and requiring social action. This relative disadvantage is influenced both by the composition of the population in these areas and by the quality and variety of the services provided to these populations.

The placement of new immigrants in development areas beginning in the 1950s diminished the opportunities for many to attain full economic and social integration. In many cases, the new settlements lacked the infrastructure required to provide even basic employment opportunities, as well as health and educational services to the newcomers. Moreover, since residence in the populated central areas of the country, especially in the big cities, was widely preferred among most immigrants, those who were placed and remained in the development areas tended to be those who were less equipped to find housing and employment on their own and required more social intervention to enhance their integration. Many were poor and had large families. As a result, many development areas lagged behind economically and did not gain from the rapid economic growth experienced in Israel's central regions.

There have been in the past and there are at present many government initiatives focused on the more disadvantaged areas (Project Renewal in cooperation with the Jewish Agency, the Ministry of Education's 30-community program, the Prime Minister's Office Program for Priority Areas, the Ministry of Labor and Social Affairs program for communities with high unemployment, and others). Nevertheless, government support for these areas has not generally led to sustained economic and social development. Despite many government initiatives to promote investment in peripheral areas, employment and economic development continue to be a problem. As a result, disadvantage persists and hinders the development of adequate social and educational services. Development areas have problems attracting high quality professionals in the areas of social welfare and education. Local resources required to build innovative and comprehensive social and educational programs are limited, despite more generous government allocations, hindering realization of equal opportunities.

In addition to the larger concentrations of disadvantaged populations in the peripheral areas, there are also many similar towns and neighborhoods in the central parts of the country, where immigrants were settled in inferior crowded housing complexes. These towns and neighborhoods have characteristics similar to those of the development areas in spite of the greater accessibility of employment opportunities and services. It is difficult to identify clearly evidence of the disadvantage in these central towns and neighborhoods, since information is confounded by statistics pertaining to more prosperous populations in the same cities or regions.