How Ukraine Can Overcome Labour Shortage Caused by War

Thursday, 14 September 2023

Both male and female labour forces in Ukraine perform different functions. Therefore, it is worth considering a shortage of male labour, which has primarily affected agriculture and heavy industry, due to the war.

Western countries had already faced similar challenges after World War I and World War II.

Yana Okhrimenko, Senior Economist at the Center for Economic Strategy, has studied their experiences to determine what the Ukrainian government can do to overcome the shortage of male labour. You can read more in the article How West Overcame Labour Crisis After World War II: Lessons for Ukraine.

Option 1: Do Nothing

In a scenario where the government does nothing to correct the labour market situation, it is quite likely that more women will enter "male" professions due to necessity. However, the problem lies is that without the necessary qualifications and support, such a "desperate move" does not lead to effective female labour, significant production growth, or improvement in workers' living standards.

Option 2: Encourage Women to Enter Male-Dominated Professions

A policy of actively encouraging women to enter male-dominated professions has a positive impact on society as opposed to a policy of non-intervention.

During World War II, the United States actively recruited women to join the workforce. The image of a woman with red lipstick and in work overalls was promoted. However, this effect was short-term, as most veterans returned to their jobs after the war. In the United States, only about 0.3% of the mobilised during the war had not return to their previous employment. In Ukraine, the gender structure of the labour force may change significantly in the long term.

Under this scenario, the involvement of women in the workforce is accompanied by increased demand from enterprises.

Option 3: Force, Persuade, or Manipulate through Wages

In the post-war UK from 1945 to 1949, the Labour government implemented something akin to state planning for the shortage of male labour.

Workers with the required qualifications were persuaded to work in key sectors, and refusal could result in legal liability.

The failure of the "force and intervention" policy is relatively easy to explain. Such a strategy disrupts the mechanisms of a free market.

Later, the British government turned to another strategy – recruiting international labour.

Option 4: Attract International Workers

The British Nationality Act of 1948 significantly simplified access to the UK for citizens of Ireland and Commonwealth nations (formerly the British Commonwealth). This helped alleviate the post-war labour shortage.

Attracting international labour is a controversial topic since there is a risk of an influx of cheap and low-skilled labour.

A key characteristic of successful immigration policy is selectivity: preference is given to migrants with high qualifications or in-demand professions.

Another key condition is having a strategic vision and an understanding of the direction in which further development is needed.

New Zealand can be considered a modern example of selective immigration policy.

In conclusion, of all the possible solutions to the labour shortage problem, only two strategies seem acceptable.

First, employers can encourage women to enter "male" professions and provide the support.

Second, the shortage can be overcome through selective recruitment of migrants with high qualifications or in-demand professions.

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