Israel’s Economic Miracle

"One of the most controversial issues in current Israeli politics is the large number of religious Israelis who are paid to study the Torah and receive military exemptions for their study. I am not trying to assess whether, on theological or political grounds, this is good or bad policy. I would only observe that it is a classic example of microeconomics at work. If you reward people for withdrawing from standard labor markets, you will find that many of them withdraw in exactly the predicted manner."