Decrease in Labor Force in Ukraine Since the Beginning of the War

by Roman Cheplyk
Thursday, June 6, 2024
Decrease in Labor Force in Ukraine Since the Beginning of the War

The labor force in Ukraine has seen a significant decline since the start of the war, with a reduction of 2.1 million people, or approximately 12%, bringing the total labor force down to 15.2 million

This information is detailed in a joint report on economic policy priorities prepared by the Ministry of Economy and the Ministry of Finance.

Key Findings from the Report:

  1. Inactive Workforce:

    • About half of the labor force in Ukraine is currently inactive, meaning they are not working and not seeking employment.
    • Nearly three-quarters of employers in the country report a shortage of personnel.
  2. Impact of Military Actions and Population Reduction:

    • The decrease in the labor force is attributed to ongoing military actions and a reduction in the population.
    • The rapid aging and overall reduction of the population, which were pre-war issues, have further complicated the situation.
  3. Projections for the Future:

    • It is projected that returning refugees will increase the labor force to between 16.0 and 16.4 million people by 2026.
    • Despite this increase, the projected labor force will still be 0.9 to 1.3 million less than the pre-war peak of 17.3 million people in 2021.
  4. Need for Labor Force Attraction and Reforms:

    • The report underscores the need to attract more labor force, stimulate the return of refugees, and increase labor force participation, especially among women, to support economic recovery.
    • Ukraine is committed to implementing necessary reforms to address these issues but also requires assistance in providing social services and employment opportunities to attract more workers.

Additional Insights:

  • According to an April study by the European Business Association in partnership with labor market analytics expert Tetyana Pashkina, nearly 74% of employers in Ukraine are experiencing a shortage of personnel.

The findings highlight the urgent need for strategic measures to bolster the labor force and support the country's economic recovery amidst ongoing challenges.

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