Is the NIS 70 m plan for haredi employment going to work without a draft law?

The government approved on Sunday a NIS 70 million plan to encourage employment for men in the haredi sector. The plan emphasizes incentivizing education and gaining skills to help them secure better jobs.

The plan includes subsidies and loans, 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 with that of their non-haredi counterparts, and it may be a much more significant problem than their participation in the workforce, according to Dr. Eitan Regev, an economist and vice president of data and research at the Haredi Institute of Public Affairs.

When looking at the data without distinguishing by gender, about 70% of haredim are employed, compared with 85% of the general population, and the gap in workforce productivity between haredi and non-haredi workers is 90%, according to the institute’s 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.

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

Many haredi men avoid enlisting 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 said.

“The limitation of the exemption is a very serious impediment to the efficacy of the plan” approved Sunday, he 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, he added.

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 haredi public and also enable earlier entry into 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.