The modern reserve system, developed in the 19th century, basically conscripts all healthy young men for two or three years of active military service, then keeps them in reserve units for twenty years or more. Once in the reserves, the men train for a few weeks each year, and are called to active duty only if there is a national emergency. This enables a nation to maintain a much larger force of trained troops, without the expense of keeping most of them on active duty.
But after the Cold War ended, and the likelihood of a major war receded, so did the major reason for reserve armies. Many countries got rid of conscription, and most of their reserve troops. Like the United States and Britain, which got rid of conscription in the 1970s and 1960s, respectively, reserve troops were recruited just for the reserves. These recruits received about six months of training, and then remained in the reserves as long as they wanted to, and were able (rarely past age 60). But these reserves were still intended only for call up in there were a major war. Otherwise, there were short call-ups for national disasters, or civil disorder.
The United States and Israel have the same problem with their reserves. Since late 2000, most Israeli reservists have been called several times, serving up to a year or more. Since late 2001, American reservists have had the same experience because of the war on terror, and for duty in Iraq. The reservists in both countries have never experienced this sort of thing before, and none of the reservists are happy with the situation.
In both countries, the majority of the reservists are in the army. One important difference is that Israeli reservists are not volunteers. Israel conscripts most of its young men, and many of its young women for military service. Being in the reserves is required by law. In the United States, the reservists are volunteers. Nevertheless, both countries realize that poor morale among reservists makes the current system untenable. Both countries are looking at the same kinds of reforms. What all the proposals boil down to are fewer call-ups, and more money for the reservists. In Israel, this just means raising the pay for soldiers called to active duty, to reduce the economic damage many of them suffer because of the loss of their usual income while serving. In the United States, its a little more complicated. Pay is already pretty high, and you cant give more to reservists on active duty, who are already doing the same work for the same pay as the active duty troops. But you could add more fringe benefits, like military health care, or comparable, health insurance, for reservists. Now they only get that benefit when they are on active duty. The U.S. can also make education benefits available for reservists.
What it comes down to is more money, fewer activations, and fewer reservists. As the United States has already done, Israel is looking to replace more soldiers with civilians. When so few people can be called up, you want every one to count.
Israels reserve system, which has made its armed forces the most powerful in the Middle East, is falling apart. The cause is five years of calling up reservists to protect the population from Palestinian terrorists. The reservists are tired of all the call ups, and many are beginning to avoid reserve duty, either legally or otherwise. Many of those that do show up, are not very enthusiastic, and this reduces the effectiveness of reserve units.