Average cost of a reservist to the economy: 53,000 shekels per month
The new estimate is about 10% higher than that published in 2024. According to the study, the wages of reservists aged 25-44 are 42% higher than those of workers who were not absent due to reserve duty
The average economic cost of a reservist soldier is about 53,000 shekels per month, the chief economist at the Ministry of Finance announced today (Tuesday). This estimate is about 10% higher than the previous estimate from 2024, which was 48,000 shekels per month. The update stems from the fact that in the current study, the Ministry of Finance examined the employment characteristics of reservists, and was not satisfied with the general average wage in the economy. On the other hand, the study also updates the cost of a female reservist soldier to 27,000 shekels per month, compared to 32,000 shekels in the previous estimate.
The Ministry of Finance's calculation of the "economic cost" consists of four components: an estimate of the loss of economic benefit that the employee would have generated if he had not been in the reserves, an estimate of the loss of seniority and experience that he does not gain while in the reserves, the damage to the economic activity of the spouse, and the loss from postponing academic studies.
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The average salary of a reservist aged 25-44 who is absent from work is 18,841 shekels.
(Photo: Shutterstock)
As mentioned, the current estimate is based on the fact that the Ministry of Finance clearly and accurately described the demographic characteristics of employed reserve servicemen (the study does not deal with retired military personnel who are not working). The findings are not surprising, but they reinforce what we know in general: although non-ultra-Orthodox Jewish men make up only 36% of all workers in Israel, their share of the total number of those absent from work due to reserve service is 83%. In other words, only 17% of the total number of those absent from work due to reserve service are not Jews, ultra-Orthodox, or women. In addition, about 75% of all retired military personnel who did not show up for work are between the ages of 25 and 44. The percentage of students among retired military personnel is 13% (compared to 7% in the population).
Only 8% of those absent due to reserve service are self-employed, although their percentage in the economy is 14%. This may indicate that self-employed people do not report for reserve service due to their inability to leave the business, or alternatively that self-employed people find a way to continue operating the business even while on reserve duty. Also, 70% of self-employed people who did not report for work have children at home, compared to 56% of employed people who are not on reserve duty, and 63% have small children, compared to 51% of employed people who are not on reserve duty.
The average salary of a reservist aged 25-44 who is absent from work is 18,841 shekels - 42% higher than the average salary of someone who is not absent, which is 13,310. As a result, the household cost of a young reservist has been revised to approximately 39 thousand shekels per month (compared to 33 thousand shekels in the previous estimate) and of an older reservist (31-39) to 68 thousand shekels per month. On the other hand, female reservists earn less on average than non-reservists, and therefore their household cost has been revised downwards to approximately 27 thousand shekels at a young age, and to approximately 37 thousand shekels at an older age.
These studies have two main implications. One meaning is a call for the IDF to reduce reserve days. In this context, the Ministry of Finance shows that immediately after active military conflicts, the number of reserve soldiers drops dramatically to a level of about 20,000 soldiers. However, it is important to mention that 20,000 is a much higher level than it was on the eve of the war, and then what was estimated by the Nagel Committee for the Examination of the Defense Budget (which estimated 7,000 reserve soldiers per year). The second meaning is that politicians must find a way to increase the recruitment of the ultra-Orthodox, since recruiting Haredi soldiers for regular IDF service could save billions of shekels per year.
The study itself refrains from discussing the recruitment of ultra-Orthodox soldiers, but the calculations can be easily done. If we replace 10,000 reserve soldiers with 10,000 regular service soldiers (a scenario that currently seems very remote), the economic cost would drop from 53,000 shekels per month to 26,000 shekels per month. It should be noted that the cost of an ultra-Orthodox soldier to the economy is probably lower, because his average income is lower than that of regular soldiers today, both due to the low income and due to the low employment rates. However, in such a scenario, the economic benefit is 27,000 shekels per month per soldier, 270 million for ten thousand soldiers per month and 2.7 billion in annual benefit.
