(photo credit: REUTERS/BAZ RATNER)
Lecturing before the Israel Economic Association last year, Bank of Israel Governor Dr. Karnit Flug warned of a major slowdown in future GDP growth if the burgeoning haredi (ultra-Orthodox) population is not integrated into the labor market.
“If we don’t influence the fundamental causes that are bringing about lower productivity and slower growth,” Flug warned, “not only will we fail to catch up with the productivity levels of the most advanced Western countries, but the demographic trends and processes we are currently seeing will work to significantly slow down the rate of future GDP per capita growth.”
Flug devoted a large part of a speech she gave in May at a conference sponsored by the Israel Democracy Institute (IDI) to the haredi education system. She quoted a Bank of Israel study that found 17 years of study by males in haredi educational institutions to be the equivalent to 10 years of study in institutions where core curriculum is taught, as measured by salary levels.
These argument are familiar, and have been repeatedly stated by numerous economists including Flug’s predecessor, Stanley Fischer.
The haredi population is growing at an annual rate of around 4 percent, with the average haredi woman having 6.9 children; the vast majority of male haredim shun secular learning and delay entry into the labor market to avoid IDF service. When they eventually do try to find work, their lack of secular education makes it difficult to integrate into a labor market that demands high levels of proficiency in math and English.
As a result, the haredi population tends to be less productive economically, poorer financially, and more dependent on welfare transfers, all of which serves as a damper on the entire economy.
But such doomsday predictions rest on the premise that haredi society is static, and assumes past trends will continue unchanged. Data released on Monday by the IDI suggest otherwise. Increasing numbers of Haredi men are serving in the military, obtaining higher education and joining the workforce, according to the 2016 Statistical Report on Ultra-Orthodox Society in Israel.
Indeed, employment among haredi men is on the rise: 50 percent worked in 2015 compared with 35% in 2002.
Haredi women’s roles are also changing. Of particular interest is the high employment rate among haredi women, who are able to integrate into the job market more easily than haredi men because their curriculum includes high levels of math and English. Women have become the primary breadwinners in many haredi households, which has led to a change in family roles.
Haredi men are becoming more involved in childrearing, while their wives spend longer hours at work.
Ironically, in this highly traditional, male-dominated society, women are increasingly gaining opportunities for professional advancement. This phenomenon was documented by Bar-Ilan University doctoral student Dvorah Wagner in an article entitled “The Erudite Haredi Men: Roles, and Substance in the Israeli Family” that appeared in the June 2015 edition of the Hebrew-language journal Haredi Society. The IDI report also found higher numbers of haredi men enlisting in the IDF or performing National Service – about 30% of the annual cohort of eligible males does either army service or National Service.
Dr. Gilad Malach, one of the IDI report’s authors, said the results demonstrated a definite trend in the community toward integration in military service, higher education and employment. In fact, about one-fifth of the haredi population is pursuing or has pursued an academic degree.
Much remains to be done to help the haredi community lift itself out of poverty. Haredi-friendly core curriculum equivalents should be devised for boys’ schools; haredi women who are principal breadwinners should be encouraged with state-subsidized child care; and state funding should be provided to institutions that give occupational training to haredi men, while respecting the community’s norms.
The haredi community will continue to grow at a faster rate than the national average, and will make up a larger percentage of the Israeli population. However, the haredi community of the future will be very different from the one we know today. Instead of being a drag on the economy, haredim might even become a catalyst.
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