Israeli Treasury Estimates Economic Cost of Reservists at 53,000 Shekels Monthly

The Chief Economist at the Israeli Treasury reported on Tuesday that the average economic cost of a reservist soldier has risen to approximately 53,000 shekels per month, marking a 10% increase from the previous estimate of 48,000 shekels in 2024. This updated figure reflects a detailed assessment of employment characteristics of reservists rather than relying solely on average wages. For female reservists, the cost was revised downward to about 27,000 shekels per month.

The Treasury's calculation of "economic cost" includes lost worker productivity, loss of seniority and experience, impact on spouses' economic activity, and delays in academic studies. The report highlights that Jewish non-Haredi men represent only 36% of the workforce but account for 83% of absences due to reserve duty. About 75% of reservists absent from work are aged 25 to 44, with 13% being students compared to 7% in the general population. Only 8% of those absent are self-employed, lower than the 14% average, suggesting difficulties in leaving or managing businesses during service. Additionally, 70% of absent reservists have children at home, and 63% have young children, significantly higher than the overall workforce.

The average salary of reservists aged 25 to 44 who miss work is 18,841 shekels, 42% higher than those not absent. The economic cost for younger reservists is about 39,000 shekels monthly, while for older reservists it reaches 68,000 shekels. For women, the cost is approximately 27,000 shekels for younger and 37,000 for older age groups.

The Treasury emphasized two key implications: the need to reduce reserve duty days after active conflicts and the potential savings from recruiting more regular soldiers. Replacing 10,000 reservists with regular soldiers could reduce the economic cost from 53,000 to 26,000 shekels per month, saving the economy 270 million shekels monthly and 2.7 billion annually. The report also notes that the economic cost of Haredi soldiers may be lower due to their lower average income and employment rates.