NIS 70M plan to boost haredi employment faces IDF exemption challenge – Israel News

The government approved on Sunday a NIS 70 million plan to encourage employment for men in the haredi sector with a special emphasis on incentivizing education and gaining skills that will enable them to obtain employment at a high wage.

The plan includes subsidies and loans, aimed at enabling haredi men to join the workforce in higher paid positions and improve their labor force productivity.

The productivity of haredi workers is very low compared to the productivity of their non-haredi counterparts, and may be a much more significant problem than their participation in the workforce, VP of data and research at the Haredi Institute of Public Affairs, economist Dr. Eitan Regev explained.

When looking at the data without distinguishing by gender, around 70% of ultra-Orthodox people are employed, as opposed to 85% of the general population; while the gap in workforce productivity between haredi and non-haredi workers is 90%, according to institute data.

This means that the government’s focus on attempting to increase haredi productivity by incentivizing and enabling education should make a great deal of sense. The problem with this plan, however, is that the draft law as it pertains to haredim is a significant barrier to haredi workforce participation for men – making education incentives much less effective.

Haredim are currently exempt from IDF service given that they remain in yeshiva until age 26. This incentivizes many ultra-Orthodox men to not enter the workforce until after that age, even if they might otherwise choose to leave yeshiva and work.

Many ultra-Orthodox men avoid drafting to the IDF not because they want to study, but because they are afraid of the loss of haredi identity that many fear IDF service could lead to, Regev explained.

“The limitation of the exemption is a very serious impediment to the efficacy of the plan” approved Sunday, Regev said. As haredim plan for the future while knowing that they will not be entering the workforce until they are much older, the incentive structure for secondary education is impacted. 

Potential solution for the haredi issue

Regev proposed a possible solution – IDF service for haredim that is long enough to train them for meaningful reserve service – which would help meet the IDF’s growing needs, and short enough to make a haredi draft more acceptable to the ultra-Orthodox public, and also enable earlier entry to the labor force.

This solution could address both the issue of haredi labor force productivity and participation, while also satisfying Israel’s increased security needs.