LABOUR MARKET REGIME SHIFT IN UKRAINE, 2020–2024: STRUCTURAL EVIDENCE OF A WAR-INDUCED SUPPLY SHOCK
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Abstract
The purpose of the paper is to analyse structural changes in Ukraine’s labour market during the period 2020–2024, with particular emphasis on the transition from cyclical fluctuations to a potential labour market regime shift induced by the full-scale invasion of 2022. The study aims to identify whether observed post-2022 dynamics reflect a temporary disequilibrium or a persistent supply-side structural transformation. Methodology. The empirical analysis is based on a macro-level comparative and econometric approach using annual labour market indicators for the period 2020–2024. The study integrates data from official statistical sources, including employment, labour force participation, unemployment rates, wage dynamics, vacancy indicators, and regional labour distribution. Structural break analysis is applied to detect potential regime changes in labour supply dynamics, complemented by sectoral and regional decomposition to capture heterogeneous adjustment patterns across the economy. Results. The findings indicate that the COVID-19 shock of 2020–2021 primarily reflects a cyclical, demand-driven contraction with relatively stable labour force participation and gradual wage adjustment. In contrast, the 2022 full-scale invasion represents a significant structural shock characterised by a marked decline in labour supply, increased labour market fragmentation, and rising mismatches between labour demand and supply. Empirical evidence suggests the presence of a statistically significant structural break in labour force dynamics after 2022. Post-shock adjustments reveal a transition towards a labour-scarcity regime, accompanied by rising vacancies, sectoral reallocation of employment, and pronounced regional disparities in labour market outcomes. Practical implications. The results imply that labour market policy in Ukraine should shift from short-term stabilisation measures towards long-term structural reconstruction strategies. Priority should be given to labour force reintegration, reduction of spatial mismatches, reskilling and upskilling programmes, and institutional strengthening of labour market matching mechanisms. Policies focused solely on demand stimulation may be insufficient under conditions of persistent labour supply constraints. Value / originality. The study contributes to the literature on labour market adjustment under extreme shocks by providing empirical evidence of a conflict-induced structural transformation in a middle-income open economy. Unlike traditional recessionary frameworks, the Ukrainian case demonstrates how armed conflict simultaneously affects labour supply, spatial allocation, and institutional efficiency, resulting in a hybrid labour market regime characterised by coexistence of labour shortages and unemployment.
How to Cite
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labour market transformation, war-induced shock, labour supply contraction, structural break, labour scarcity, post-war reconstruction
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