A Cost-Benefit Analysis of Civilian National Service in Israel

A comprehensive study conducted by ADALYA for the National-Civic Service Forum examined the cost-effectiveness of Israel’s Civilian National Service program for volunteers from four vulnerable populations: the Arab sector; new female immigrants; youth with physical or mental disabilities; and at-risk youth. Findings show that an average investment of NIS 43,0000 per Israeli volunteer can save between NIS 200,000─500,000 in costs over the course of a volunteer’s lifetime.

The Economic Study
The economic study calculated all the costs to the state for each volunteer and compared this to the sum of benefits gained by the state per volunteer over the course of a volunteer’s life. The objective was to establish whether there is tangible quantifiable economic benefit, beyond its numerous social and societal benefits, to increase the number of Civilian National Service positions.

Cost of Service
The state allocates NIS 28,000─35,000 per volunteer. The basic funding includes a living allowance, travel, coordinators (one coordinator per 60 volunteers) and insurance. 
The National-Civic Service Forum’s social organization members believe it is vital to provide an additional enrichment package for youth from disadvantaged populations, and has therefore recruited funding of some NIS 11,000─12,000 per volunteer from the third sector to enhance and complement government support. The enrichment package includes training in various fields of volunteerism, personal empowerment, and preparation for entry into employment and/or higher education.

These are not fixed costs but differ according to the type of population and type of position, whether home-based or external. As such, the figure quoted represents the scope of budgeting costs. In addition, the overall cost or loss to the economy during the service period was also included, as well as the impact of excess taxation on the outcome, assuming that every service slot is funded through budgetary expansion, i.e., taxation. The economic cost in terms of impact on GDP was calculated based on the total cost. 
Benefits of Service
The benefits include the sum of all benefits derived from the following weighted components:
  • Direct benefit of the volunteer’s service; 
  • The theoretical salary that would have been paid to the volunteer during the service period, had the same activities been undertaken for pay;
  • Savings in employment surety payments during service;
  • The scope of payments made to the individual, had she or he not been volunteering during the service period;
  • Additional earnings during the course of the individual’s working life;
  • Quantification of the main benefit of service, by quantifying the present value of additional income from employment during a working life span.

Conclusions of the Study
  • National-Civic Service demonstrates positive, significant and substantial economic value to the national economy, for each of the studied populations in the short-term and for all in the long-term; 
  • The surplus economic value is not obtained from the service year itself, during which the investment is carried out, but from the participant’s contribution to GDP during her or his working life, which commences immediately following the period of service; 
  • The findings also indicate that National- Civic Service should be viewed as an investment that considerably reduces dependence of disadvantaged populations on state resources and the need to reinvest in rehabilitation at later stages;
  • The current government’s decision to increase the number of service positions for the Arab and ultra-Orthodox populations reinforces the trend to include other populations, particularly considering the proof of the benefit to the economy.

The study findings were published in The Marker (in Hebrew): click here.
עדליא ייעוץ כלכלי פורום לשירות אזרחי

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