Attachments
Executive Summary
Since February 2022, the Russian Federation’s aggression against Ukraine has had devastating impacts on Ukraine’s economy and its people, demonstrated both by a sharp contraction in GDP and the exodus of nearly 6.2 million Ukrainian refugees seeking safety abroad.
The Ministry of Social Policy of Ukraine requested the ILO’s assistance to assess the current state and prospects of the Ukrainian workforce. Specifically, the ILO was tasked with providing an estimate of the labour input that would be needed across different economic sectors to achieve the Government of Ukraine’s GDP target for the year 2032. To do this, the ILO produced three distinct scenarios which are presented in this paper.
The Baseline Scenario provides sector-level estimates of the labour input required to achieve the Ukrainian government’s 2032 GDP target. It finds that 8.6 million additional workers would be needed compared to 2022 levels. That is, to reach the target GDP in 2032, employment in Ukraine would need to grow by 67 per cent compared to 2022 levels and by 37 per cent compared to the pre-war employment levels of 2021. The projections indicate that around 60 per cent of this additional employment would need to come from services, 27.4 per cent from industry, and 12.6 per cent from agriculture.
In terms of educational requirements for these additional jobs, we estimate that achieving the GDP target set by the Government of Ukraine employment would require 4.73 million additional workers with an advanced level of education, 2.27 million workers with an intermediate educational level and 1.58 million workers with a basic educational level. In terms of the distribution of total employment required by skill level, 3.04 million (35.4 per cent) would be high-skilled jobs, 4.08 million (47.6 per cent) would be comprised of medium-skill jobs, and the remaining 1.46 million (17.0 per cent) would be comprised of low-skill occupations. The estimates suggest that some 2.27 million additional workers would require vocational training.
The Additional Scenario 1 provides an estimate of the labour productivity growth that would be required to meet the 2032 GDP target if employment in Ukraine were to recover to 2021 levels by 2025 and thereafter grow in line with historical trends. It finds that average output per worker would need to reach US$16,664 (in 2021 prices) by 2032 to reach the target GDP. This means that productivity would have to grow on average at 6.1 per cent per year between 2023 and 2032, which is twice the rate achieved historically.
The Additional Scenario 2 provides a projection for GDP in 2032 by assuming that employment and productivity grow in line with their historical trends. In this scenario, GDP would fall far short of the target suggested by the Government (US$202 billion, compared to the Government’s target of US$246 billion). That is, if both productivity and employment grow in line with pre-2022 trends, we project that Ukraine’s GDP in 2032 would be 17.8 per cent lower than the target set by the Ministry.
The report concludes by examining prospects for achieving the employment growth of 8.6 million projected in the Baseline Scenario from a gender perspective. Specifically, to achieve the Government’s target GDP, we estimate that the growth rate of Ukraine’s female workforce would have to rise sharply to 5 per cent annual growth between 2023 and 2032, compared to an average contraction of -1.0 per cent between 2016 and 2021.
Achieving such an unprecedented increase in women’s labour market participation would require strong policies aimed at enhancing employment prospects for women with children, such as affordable childcare and flexible working arrangements. It would also require effective incentives for women with lower educational levels to seek and secure employment, as this cohort of women has tended to participate less than more educated women in the Ukrainian labour market.