So, I've been reading about the history of the Haredi exceptions to the draft for the IDF, and how much it's expanded over the years. I understand the anger about unequal treatment coming from Israelis who are subject to the draft, but to what degree does the 'Status Quo' exception have an effect on military readiness? Did it ever? Were Haganah/early IDF leaders angry about the potential loss of recruits?
Further sources on this would be great, too.
That's an interesting question!
Ben-Gurion, according to Anita Shapira's biography, reached the agreement with the Union of Israel party (Agudat Yisrael) on the status quo just before the state was established. She notes that Ben-Gurion acted under the assumption that yeshiva students would soon disappear, and that he regretted the status quo arrangement because the number of yeshiva students increased instead. He criticized the exemption, but never canceled it.
As the years went on, Ben-Gurion became less comfortable with it. The question he framed was not one of military readiness so much as a question of ethics. He framed it in one statement as, "whether it is right for the son of one mother to be killed in defense of the homeland, while the son of another mother sits in his room and studies in safety". However, it's important to note that the initial policy Israel adopted was not one of exemption, but of deferment. While it was essentially exemption, it came with important caveats. In the 1950s, for example, yeshiva students over 25 would still be drafted, but only for 3 months of reserve training/duty.
But the important point here is that the early stages of the policy never threatened military readiness or recruitment in early Israel because there were never many yeshiva students claiming the deferment and exemption.
As noted in the Israeli High Court of Justice case, Rubinstein v. The Minister of Defense (1998), HCJ 715/98, the number of deferments granted was fixed at roughly 400 per year. Then in 1975, it was raised to 800. But in 1977, after the first ever right-wing government took power in Israel, the Orthodox parties joined the government and abolished the quota altogether. By 1979, following peace with Egypt, the idea of a concern on the subject was less significant by far. But in 1977, it was a concern, because deferral filings exploded significantly. They went from 800 to 8,200 in 1977, and up to 17,000 by 1987. However, given Israel's population had reached over 4.3 million, and the IDF was increasingly certain of military superiority over the states it was still technically at war with, this did not dominate the political scene. And early-on, the idea of 400 students causing a drop in military readiness simply could not be argued, which is why Ben-Gurion couched the question in ethics and burden-sharing.