Failure to draft ultra-Orthodox cost economy NIS 8.5 billion

These estimates were based on publicly available information and BDO estimates, and the calculation was based on conservative assumptions.

By EVE YOUNG DECEMBER 19, 2024 14:02

HAREDI MEN learn at the Mir Yeshiva in Jerusalem’s Mea She’arim, Sept. 13, 2023. (photo credit: FLASH90)

Failing to draft ultra-Orthodox Israelis to the IDF cost the country NIS 8.5 billion, investment firm BDO estimated in a report commissioned by civil religious-freedom movement Israel Hofsheet.

Had 27,000 ultra-Orthodox people, which BDO calculated makeup 40% of those whose service has been pushed off for yeshiva study, been drafted, it could have saved this NIS 8.5 billion, the firm asserted.

This saving would have been made possible by replacing reservists with regular-service ultra-Orthodox soldiers.

This savings breaks down into NIS 2.9 billion of budgetary expenses, a cost of NIS 3.5 billion to gross domestic product caused by reservists missing work, a cost of NIS 0.9 billion through harm to a partner's employment, and a cost of NIS 2.2 billion due to loss of seniority.

These estimates were based on publicly available information and BDO estimates, the firm said, adding that its calculation was based on conservative assumptions, including that the report does not include possible additional harm to freelancers and businesses.

An illustrative image of haredi (ultra-Orthodox) Israeli Jews near a sign for an IDF recruiting office. (credit: FLASH90)

Additionally, the report only accounted for one hour of lost labor per day for reservists' partners because this is what is allowed by law. This is likely a conservative estimate given the challenges posed to partners of reservists and the potential impacts on them.

Increases in amount of reserve duty and implications for the eocnomy

The report also focused on the potential economic impact of an increase in the amount of reserve duty, discussed by the IDF and Israel's political echelon, saying that this would have a serious impact on Israel's economy.

Not only would increased reserve duty comes with a budgetary cost, but it would harm economic activity, the employment and income of the partners of reservists, and lead to missed education and downtime for reservists, the report said.

The report highlighted that some 50% of reservists are contracted employees, 31% are freelancers, 16% are students, and just 3% are unemployed.

Reservists are among the country's productive population and are in the prime of their employment, the report stressed, adding that this means that extending their reserves has a significant impact on production.

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The report compared the cost of a regular service haredi soldier to the cost of a reservist, using this as part of the basis for calculating the costs of not drafting ultra-Orthodox soldiers.

While a reservist costs the economy around NIS 2,400 per day, a regular service ultra-Orthodox soldier would cost around NIS 700 per day, the report said. This estimate was based on IDF salary, including stipends for children, offset by the savings of the costs to the budget of yeshiva students through stipends and other expenses.