Labor market challenges of an aging and shrinking population in Ukraine
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Date
2014
Authors
Kupets, Olga
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Journal ISSN
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Abstract
Ukraine is in the process of a serious demographic transition – a dramatic decline of the population
along with its rapid aging. After a brief overview of demographic trends and recent labor market trends in
Ukraine, this paper analyzes the implications of demographic changes for the labor market, in particular on
labor supply and productivity. The labor force projections are estimated by combining population projections
in 2010-2060 calculated by the UN with the labor force participation rate projections for 2010-2020 developed
by the ILO and by applying several scenarios on the development of labor force participation rates over the
2021-2060 period. The projections suggest that, even under very optimistic scenario assuming an increase in
labor force participation rates to over 90 percent in all 5-year age groups from 25 to 64 years by 2060, Ukraine
is not likely to prevent significant decline of the labor force. The simulations of labor productivity
demonstrate that it is possible to cushion the negative impact of these demographic changes on the living
standards of population but significant productivity and technological improvements are needed. The
Government of Ukraine can play a significant role in mitigating some of the negative effects of population
aging through a three-layered policy approach: the fundamentals that support productivity and employment
growth, adequate labor policies, and specific policies that induce higher labor force participation of older
workers (active aging).
Description
Keywords
labor force projections, active aging
Citation
Kupets O. Labor market challenges of an aging and shrinking population in Ukraine // The Journal of Comparative Economic Studies. – 2014. – Vol. 9. – P. 99–134.