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Sect, Subsidy, and Sacrifice: An Economist's View of Ultra-Orthodox Jews

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Eli Berman

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Abstract

The Israeli Ultra-Orthodox population doubles each seventeen years. With 60 % of prime aged males attending Yeshiva rather than working, that community is rapidly outgrowing its resources. Why do fathers with families in poverty choose Yeshiva over work? Draft deferments subsidize Yeshiva attendance, yet attendance typically continues long after they are draft exempt. We explain this puzzle with a club good model in which Yeshiva attendance signals commitment to the community. Subsidizing membership in a club with sacrifice as an entry requirement induces increased sacrifice, compounding the distortion and dissipating the subsidy. Policies treating members and potential entrants equally are Pareto improving. The analysis may generalize to other by increasing the stringency of prohibitions and sacrifice.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6715.

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Date of creation: Aug 1998
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Handle: RePEc:nbr:nberwo:6715

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D6 - Microeconomics - - Welfare Economics
D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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  3. Cole, Harold L & Mailath, George J & Postlewaite, Andrew, 1992. "Social Norms, Savings Behavior, and Growth," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1092-1125, December. [Downloadable!] (restricted)
  4. George A. Akerlof, 1997. "Social Distance and Social Decisions," Econometrica, Econometric Society, vol. 65(5), pages 1005-1028, September.
  5. Iannaccone, Laurence R, 1992. "Sacrifice and Stigma: Reducing Free-Riding in Cults, Communes, and Other Collectives," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 271-91, April. [Downloadable!] (restricted)
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  6. Azzi, Corry & Ehrenberg, Ronald G, 1975. "Household Allocation of Time and Church Attendance," Journal of Political Economy, University of Chicago Press, vol. 83(1), pages 27-56, February. [Downloadable!] (restricted)
  7. Landers, Renee M & Rebitzer, James B & Taylor, Lowell J, 1996. "Rat Race Redux: Adverse Selection in the Determination of Work Hours in Law Firms," American Economic Review, American Economic Association, vol. 86(3), pages 329-48, June. [Downloadable!] (restricted)
  8. Greif, Avner, 1994. "Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 912-50, October. [Downloadable!] (restricted)
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