Situation in the Ukrainian Labor Market: Labor Shortage and High Unemployment Rate

The Ukrainian labor market is experiencing a challenging period characterized by a paradoxical combination of a shortage of skilled workers and a high unemployment rate. Since the beginning of the full-scale invasion by the Russian Federation in 2022, the labor sector has undergone significant changes that have impacted economic activity and employment opportunities.

Key Changes in the Labor Market
As a result of migration processes, the workforce has decreased to 15 million people, which is 12% less compared to the pre-war period. During this time, over 7 million citizens have left the country, while another 4 million have become internally displaced persons. These trends have led to a severe labor shortage, with 75% of employers reporting this by the end of 2024.

Unemployment and Regional Disparities
Alongside the labor shortage, official statistics indicate that the unemployment rate remains in double digits. By the end of 2024, this figure stood at 13.1%, decreasing to a projected 11.6% in 2025. At the beginning of the current year, 143 thousand unemployed individuals were registered, which is 7 thousand fewer than the previous year. Experts highlight significant regional differences: the East and South of the country have lost most industrial and agricultural jobs, while the West and Center are facing an oversaturated labor market due to the influx of internally displaced persons.
“As a result, the most vulnerable groups of the population find themselves in the worst situation. The current employment policy, oriented towards pre-war realities, does not take these trends into account, leading to increased inequality and the risk of social unrest,” analysts summarize.

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