Ukraine's labor market resists war
According to a study by the Rockwool Foundation in Berlin, four years after the start of the war, the labor market in Ukraine, contrary to fears, is remarkably resilient. The unemployment rate, which exceeded 20 percent in the first months after the start of the war, is now around 11 percent – only a few percentage points higher than before the war, dw.com reported.
The level of real wages (the amount of goods and services that can be purchased with nominal wages), after a decline until 2024, has again reached and even surpassed pre-war levels, analysts said.
“Victories in long wars are often won in factories, not on the battlefield. The Ukrainian labor market has so far withstood shocks of an unprecedented scale,” said one of the authors of the study, Professor at the Bocconi Commercial University in Milan Tito Boeri. He pointed out that Ukraine had experienced a “surprisingly rapid” reallocation of labor force under extreme strain.
The working-age population is shrinking
Since the start of Russia’s full-scale war against Ukraine in February 2022, the Ukrainian labor market has suffered shocks of historic proportions. Only due to the departure from the country of a large number of people of working age, about 3 million workers were lost, experts say. At least 500,000 more people were drafted into military service, 150,000 died as a result of military operations.
In total, the working-age population in the regions controlled by the Ukrainian government has shrunk by about a quarter, the study said.
Labor market transformation
Since the beginning of the war, economic activity in Ukraine has shifted from the front line to the western regions, and employment in the defense industry has increased.
Researchers also attribute the resilience of the Ukrainian labor market to flexibility in wages and hiring practices, as well as opportunities to work outside the office. In addition, the growth of female employment, including in fields traditionally dominated by men, has played a positive role.
Meanwhile, the International Monetary Fund forecasts that Ukraine’s economy will grow by 4.5 percent in 2026.
