European migration of Ukrainians worsens the job market crisis and risks leading to a reduction in GDP
The mass migration of Ukrainians to European countries, driven by the ongoing war, is significantly impacting Ukraine’s economy. The exodus of approximately 3 million Ukrainians since the full-scale invasion has left a gaping hole in the labor force, slowing economic growth and contributing to various economic challenges.
Labor market activity has not fully recovered to pre-war levels, with unemployment still around 11.2% (the lowest since the war but above normal). Businesses face labor shortages, and real GDP growth slowed to approximately 2.1% in 2025 due to security threats and industrial disruptions caused by the conflict.
Key drivers of emigration include ongoing security risks, the extension of legal stay and residency options for Ukrainians in EU countries, and the allure of stable employment opportunities abroad. However, the low number of returns expected by 2027—around 100,000—indicates a need for concerted efforts to encourage Ukrainians to return home.
Addressing the migration impact on Ukraine’s economy requires a multi-faceted approach. Improved security, accelerated infrastructure rebuilding, economic revitalization, and coordination with EU policies to create effective return incentives are all crucial components.
Rapid reconstruction of critical infrastructure, such as the power grid and housing, is essential as it raises the value of subsequent private investment and improves living conditions, thus encouraging return migration. Government rebuilding programs targeted at homeowners and businesses can accelerate this process.
Creating attractive conditions for the return of Ukrainians includes ensuring affordable housing, creating jobs, developing professional retraining programs, and offering tax and regulatory incentives for small and medium-sized businesses. Ukrainians in the EU, despite earning less than locals, remain in demand due to their work discipline and willingness to work under challenging conditions.
The loss of skilled labor due to migration is leading to significant macroeconomic consequences in Ukraine. Over 4.2 million Ukrainians have integrated into the EU labor market, and their absence is felt acutely in various sectors. If some Ukrainians who have moved to the EU do not return, Ukraine’s GDP could lose up to 7.8% annually.
The development of long-term policy in the area of returning Ukrainians is becoming an urgent task for the state. Additional attention should be paid to supporting families with children and adaptation programs to integrate returning Ukrainians into new realities. Many Ukrainians in the EU work in low-skilled positions due to language barriers and lack of diploma recognition, which can be addressed through targeted initiatives.
The issue of the return of Ukrainians has been discussed at the level of the central banks of Ukraine and Poland, indicating its priority in economic strategy. As the number of Ukrainians who plan to return to Ukraine has decreased, with only 43% now planning to do so, the need for effective policies is more pressing than ever.
Ukrainians in the EU pay taxes and offset labor shortages in key sectors, making them valuable contributors to the economies of Eastern Europe. Almost 80% of Ukrainians in the EU have higher education, and Ukrainian labor is particularly valuable to the economies of Eastern Europe. However, without systemic incentives for return, some of these citizens may permanently settle abroad, weakening the country's human potential and reducing its development prospects in the medium term.
- The exodus of skilled Ukrainians to EU countries due to security risks and the allure of employment opportunities is creating a finance challenge within Ukraine's general-news industry, as the country's economy depends heavily on these professionals.
- In the face of labor shortages and economic growth slowdown, the Ukrainian government is focusing on creating attractive conditions to encourage the return of its citizens from Europe, with initiatives such as affordable housing, job creation, professional retraining programs, and tax incentives for businesses.
- Politics plays a crucial role in the return of Ukrainians, as the state needs to address security issues, expedite infrastructure rebuilding, stimulate economic growth, and coordinate with EU policies tocreate effective return incentives.
