Untangling expectations and sacrifices: Ultra-Orthodox men in Israel and the religious club model

Abstract

The ultra-Orthodox population in Israel demonstrates a higher natural growth rate compared to the general population, yet the employment rate among ultra-Orthodox men remains significantly lower. This phenomenon can be attributed to the concept of the religious club model (Berman, 2000), which posits that strict requirements and club goods foster a strong commitment to the religious community. By utilizing individual-level data collected from 256 ultra-Orthodox men and employing K-Means clustering analysis, we identified two distinct types based on their demonstrated levels of voluntary sacrifice which only partially overlapped the club’s formal admission criteria. Our findings illustrate the ultra-Orthodox religious club as inherently limited in its ability to enforce religious norms and prohibitions and as a result it is variably effective in filtering out ‘free riders’ and may not reward nonmembers despite their demonstrably consistently high adherence (‘wannabes’). Our findings also reveal a positive association between wage expectations and the likelihood of ultra-Orthodox men entering the labor market, implying a potential trade-off between earning potential and the extent of social fines. Interestingly, our results also offer insight into the increased adherence to Halacha (Jewish religious law), despite the rise in real wages. Furthermore, our simulation offers policymakers a tool to evaluate the necessary incentives to encourage greater participation of ultra-Orthodox men in the labor market. This has implications for both enhancing economic outcomes and understanding the intricate interplay between religion, social norms, and employment decisions.