Israel's Reserve Call-Up Significantly Impacts Labor Market and Spurs Educational Support

The extensive mobilization of IDF reservists due to the Israel-Hamas conflict has profoundly affected the country's labor market, according to research published by the Israel Democracy Institute (IDI) think tank on Sunday. Drawing from data provided by the Central Bureau of Statistics, the study highlights the unprecedented scale of reserve duty and its repercussions on both reservists and employers.

Unprecedented Labor Market Disruption

"The scale of reserve duty seen during the Israel-Hamas War is unprecedented at least in recent decades, and it constitutes a heavy burden on both reservists and employers," the IDI report stated. Prior to October 2023, less than 0.1% of working hours were lost to reserve duty. However, in October alone, this figure skyrocketed to 5% of all working hours.

Between January and September 2023, an average of 3,200 workers were absent from their jobs each month due to reserve service, typically for periods shorter than a week. In stark contrast, from October to December 2023, an average of 130,000 workers were absent per month, with most away for the entire month. Although the number of reservists has decreased over the course of the conflict, it remains significantly higher than pre-war levels.

Economic Impact and Household Strain

Calculating the precise economic impact on the country's Gross Domestic Product (GDP) is challenging, as reservists' IDF salaries are included in GDP calculations, partially offsetting the damage through public spending. However, the IDI estimates that a year of reserve duty at the current level would cost approximately NIS 7.9 billion, or about 0.64% of business output.

The average cost per reservist is estimated at NIS 45,000 per month, based on calculations from the Finance Ministry. "In terms of the state budget alone, expenditure on compensation to reservists in 2023 reached NIS 8.2 billion, and in 2024 an additional almost NIS 4 billion has been budgeted, most likely insufficiently," the report noted.

The prolonged reserve service has also had significant impacts on households, affecting the labor market indirectly. At the end of 2023, spouses of around 5% of non-Haredi Jewish women were in reserve duty. This percentage decreased to approximately 1.3% over the course of 2024.

"This translates into more than 20,000 households in which one or both parents have been absent for several months, at an age when many couples are raising young children," the report highlighted.

Calls for Broader Participation in Reserve Duty

The IDI suggests that efforts should be made to expand the share of the population performing reserve duty. This could involve encouraging volunteerism among Arab Israelis or increasing mandatory conscription for the Haredi (ultra-Orthodox) community. Such measures could help distribute the burden more evenly across society and alleviate some of the strain on the labor market.

Tel Aviv University Supports Reservist Students

In response to the challenges faced by reservists, Tel Aviv University has announced that over 1,000 first-year students who have served at least 30 days in reserve duty since the beginning of 2024 will receive a tuition discount of NIS 2,500, representing approximately 25% of their tuition fees for the current academic year.

The university initially announced this initiative three months ago. With the enrollment process now complete, it confirms that both male and female reservist students will benefit from the program. Recognizing that the first academic year can be particularly challenging—especially for those transitioning from active duty—the tuition discount aims to ease the financial burden and allow students to focus more fully on their studies.

This reduction complements an earlier decision by the university to accept hundreds of reserve soldiers into first-year undergraduate programs through a new admission route that does not require entrance exams. This route is available across all fields of study on campus.

A Commitment to Supporting Reservists

Tel Aviv University emphasizes that these measures reflect its deep commitment to IDF reservists and their academic success. "We recognize both the academic and financial challenges that arise for them due to their service, beginning with the admissions stage and continuing into their initial university experience," a university spokesperson stated.

By adjusting admission processes and providing financial support, the university aims to facilitate the successful integration of reservist students into academic life, acknowledging their significant contributions to national security.