The Incentive Problem: An Economic Lever in the Haredi Draft Crisis
Israel’s post-October 7 manpower shortage cannot be solved by waiting for Haredi enlistment to rise organically. The current system actively subsidizes non-service while asking a shrinking group of reservists to shoulder an ever-growing burden. Bennett’s proposal seeks to reverse those incentives by shifting state benefits away from long-term non-service and toward those who serve.
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One of the issues looming largest over the coming elections is the issue of the Haredi draft.
IDF officials now warn of severe manpower shortages in the tens of thousands, while reservists continue serving repeated and extended rounds of miluim.
Many Israelis personally know reservists whose marriages, businesses, and families are fracturing under the strain. Parents are spending months away from their children. Entire reserve units are reporting growing burnout and difficulty sustaining the current pace of service. Even those continuing to serve are doing so under increasingly exhausting conditions.
Yet even amid this growing crisis, Haredi enlistment remains extremely low relative to the broader population. At the same time, the Haredi population continues to grow rapidly.
Meanwhile, the Haredi parties continue demanding larger budgets for institutions and benefits that shield their community from service.
The current system does not merely fail to solve the problem. It reinforces it.
At the core of the issue is a basic incentive structure problem. The state actively subsidizes non-service through housing assistance, daycare support, and welfare mechanisms that disproportionately benefit families in which adult men are exempt from military service, while reservists bear repeated financial and personal costs with relatively limited structural compensation. Over time, this produces a stable equilibrium in which non-service is often the economically rational choice, while enlistment carries both direct costs and strong social discouragement within communities. As a result, even those who might otherwise consider service face strong incentives to remain within the existing framework, which in turn helps sustain the system itself.
Netanyahu’s government has been trying to pass a draft law designed to satisfy the demands of the Haredi parties. Unfortunately, those demands are specifically structured around preserving mass non-service. That is why even some Likud MKs have resisted aspects of the legislation. Still, any future coalition dependent on Shas and UTJ will almost certainly face heavy pressure to preserve the current framework in one form or another.
This brings us to Naftali Bennett’s approach.
Flipping the Incentives
Bennett’s proposal begins from the same premise: that Israel’s current incentive structure actively discourages service. According to Bennett, many Haredim who might otherwise consider serving remain within the existing framework because the state structurally ties significant benefits and subsidies to long-term non-service and non-employment.
The principle behind Bennett’s plan is straightforward: state benefits should prioritize those who serve rather than subsidize those who do not. In practice, that would affect areas such as housing assistance, daycare subsidies, and other forms of government support. At the same time, more resources should be redirected toward reservists, soldiers, and their families.
There is certainly room to debate the details of Bennett’s plan. But the important principle is that it attempts to fundamentally change the incentive structure surrounding service.
The strongest counterargument against Bennett’s approach is that the Haredi community perceives major changes to the status quo as an attack on its way of life, and that aggressive reforms could ultimately slow the gradual increase in Haredi enlistment already taking place. According to this view, change must happen organically. It may be slower than many Israelis would like, but it is ultimately the only sustainable path.
A related argument is that the army itself still struggles to provide a sufficiently accommodating environment for many Haredi recruits. Military service raises real halachic and cultural concerns for a community built around strict religious frameworks and insulation from broader Israeli society. Critics argue that until the army can reliably provide more appropriate frameworks, it should not pressure sheltered young Haredi men into service.
There is real truth in some of these concerns.
First, it is important to acknowledge and deeply appreciate the thousands of Haredi soldiers already serving. They deserve enormous respect for choosing to serve despite the unique social and religious challenges they often face.
The army also genuinely has work to do in improving frameworks for Haredi soldiers. Bennett himself has emphasized the importance of “drafting our Haredi brothers with love.” He has spoken about strengthening adapted tracks such as the Hashmonaim framework and floated ideas such as yeshivot connected to border bases that would allow Haredi soldiers to combine significant Torah study with military service.
At the same time, however, we should be honest about another reality: The leaders, media outlets, and institutions that communicate the narrative that any change in the status quo is an attack on the Haredi community and their way of life do not act in good faith. These are the same parties that openly oppose any Haredi army service under any circumstances. Even substantial accommodations are often—and will continue to be—portrayed as existential threats to the Haredi way of life.
And because the IDF is a massive bureaucracy, problems and mistakes will always exist. Any soldier, religious or otherwise, can testify to that. The army will never create a perfect environment. There will always be negative stories, bad experiences, oversights, and failures that opponents of enlistment will cynically highlight as proof that Haredi service is impossible.
The Myth of Organic Change
Now to the central disagreement: what about the claim that Haredi enlistment will continue rising naturally if the government simply avoids disrupting the process?
For starters, this argument is highly speculative.
Yes, it is possible that the increase in Haredi enlistment over the past several years, from roughly 1,200–1,500 recruits annually to closer to 2,800–3,000, represents the beginning of a long-term positive trend.
Notably, IDF representatives have told the Knesset that at least part of the recent increase in Haredi enlistment appears to be driven by enforcement measures and sanctions rather than by purely organic cultural change.
But it is also plausible that this increase represents roughly the maximum enlistment we should expect under the current system, particularly following a national trauma as massive as October 7 and the war that followed.
And even if we assume the more optimistic scenario, the numbers still remain far below what would be required to meaningfully solve the IDF’s manpower crisis or substantially reduce the burden on reservists. Something else has to change.
It is also important to recognize that the current system is not neutral. By continuing to increasingly subsidize long-term non-service, the state is reinforcing the social and economic conditions that sustain it. Bennett’s argument is essentially that allowing relative economic stability within the current framework gives Haredi society the luxury to continue strongly stigmatizing military service.
His theory is that forcing a sharper economic choice may create backlash in the short term, but could gradually soften opposition to service over the long term far more effectively than the current approach of quietly encouraging enlistment while continuing to subsidize non-service.
The 2003 Precedent: When Incentives Worked
Fortunately, there is at least some precedent for this broader logic.
As Finance Minister in 2003, Benjamin Netanyahu implemented major economic reforms that significantly reduced welfare benefits, particularly those disproportionately affecting non-working Haredi and Arab households. In the short term, these reforms caused real economic pain and increased poverty rates in parts of those communities. But over time, Haredi workforce participation rose substantially.
Of course, employment is not identical to military service. Army service touches deeper religious, cultural, and ideological questions. But Netanyahu’s reforms did demonstrate something important: Haredi society is not completely immune to long-term economic incentives.
The Post-October 7 Reality
There are also people who dismiss this entire discussion because they simply do not believe Bennett or his potential coalition partners would actually follow through. After all, Bennett and Lapid already held power once before. They pursued a more assertive approach than the current government, but not one that fundamentally restructured the incentive system the way Bennett is now proposing.
But this criticism ignores how dramatically Israel changed after October 7.
Bennett himself has acknowledged that for most of his political career, he did not view Haredi enlistment as an urgent existential issue. Like many Israelis, he believed the problem would hopefully evolve gradually over time, while the more immediate priority was integrating Haredim into the workforce.
October 7 changed the math. The severe manpower shortages transformed a long-term social debate into an immediate national security crisis. To judge Bennett’s current plan by his pre-war actions is to ignore how radically the country has changed over the past three years.
And even if Bennett’s plan ultimately falls short of its ambitions, that still would not make it meaningless.
At minimum, money currently tied to sustaining the non-serving framework could instead be redirected toward reservists and their families. After years of repeated service and sacrifice, reservists would at least see a government attempting to ease their burden while signaling that the state finally recognizes the unsustainability of asking the same shrinking group of Israelis to carry the overwhelming weight of national defense. They will see a government that has their back.
After everything they have given, that kind of morale boost seems like the very least we can give in return.
