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Country Report: Ukraine Costs and Benefits of Labour Mobility between the EU and the Eastern Partnership Partner Countries Country report: Ukraine Tom Coupé Hanna Vakhitova EuropeAid/130215/C/SER/Multi ENPI - Costs and Benefits of Labour Mobility between the EU and the Eastern Partnership Partner Countries UKRAINE COUNTRY STUDY Tom Coupe Hanna Vakhitova Kyiv February 15, 2013 This country study is part of the project entitled “Costs and Benefits of Labour Mobility between the EU and the Eastern Partner Partnership Countries” for the European Commission (Contract No. 2011/270-312, tender procedure EuropeAid/130215/C/SER/Multi). The study was conducted under the direction of Luca Barbone, CASE project director. The views expressed in this paper are those of the authors, and should not be interpreted as representing the official position of the European Commission and its institutions Costs and Benefits of Labour Mobility between the EU and the Eastern Partnership Partner Countries Country Study: Ukraine ______________________________________________________________________ Contents List of Figures ................................................................................................................. 4 List of Tables ................................................................................................................... 5 List of Acronyms ............................................................................................................. 7 Executive summary ........................................................................................................ 8 Introduction ................................................................................................................... 12 a. Motivation .............................................................................................................. 12 b. Sources ................................................................................................................... 13 c. Brief description of the socioeconomic development during the last 20 years ..... 14 d. Recent economic developments ............................................................................. 17 e. Push and pull factors for migration ...................................................................... 20 f. Some information on relations with the main destination countries- EU and Russia ......................................................................................................................... 21 g. Data discussion. ..................................................................................................... 23 Chapter 1. Labour Market developments ..................................................................... 24 a. General indicators of labour market activity ........................................................ 24 b. The educational composition of the labour force ................................................. 25 Chapter 2. Migration developments ............................................................................. 27 a. Stocks and flows of migrants ................................................................................. 27 b. Destinations and how they changed over time ..................................................... 30 i. Ethnic migration. ................................................................................................ 30 ii. Ukrainians. ......................................................................................................... 32 iii. Russians. ........................................................................................................... 33 iv. Jewish people. ................................................................................................... 33 v. Crimean Tatars. .................................................................................................. 33 vi. Petty trade migration. ....................................................................................... 34 vii. Labour migration. ............................................................................................ 34 c. Composition of migrants by education, occupation, legal status, duration of trips and other relevant factors by destination ................................................................. 37 i. Seasonality of migration (average duration of trips by country) ....................... 37 ii. Illegal migration ................................................................................................. 37 iii. Sectoral and educational distribution of migrants by country ........................ 38 iv. Regional distribution of migrants ...................................................................... 41 Chapter 3. Evidence on the costs and benefits of migration ....................................... 43 a. Macro level ............................................................................................................. 43 i. Demography. ....................................................................................................... 43 ii. Employment. .............................................................................................................. 45 2 Costs and Benefits of Labour Mobility between the EU and the Eastern Partnership Partner Countries Country Study: Ukraine ______________________________________________________________________ iii. Wages. ........................................................................................................................ 46 iv. Remittances. ...................................................................................................... 46 Figure 12. Remittances .......................................................................................... 47 v. Monetary aggregates. ......................................................................................... 48 vi. Housing. ............................................................................................................ 48 vii. Education. ........................................................................................................ 49 viii. Brain drain/brain waste.................................................................................. 50 ix. Health sector. .................................................................................................... 52 x. Social security. .................................................................................................... 53 b. Household level ..................................................................................................... 55 i. Impact on household well-being. ....................................................................... 55 ii. Impact of migration on families and family members left behind. .................. 57 Chapter 4. Policy setting ............................................................................................... 60 a. The institutional setting for migration policies .................................................... 60 b. The objectives of existing migration policies and possible future negotiations .. 63 Chapter 5. Scenarios for future migration ................................................................... 64 Summary ....................................................................................................................... 67 References. .................................................................................................................... 69 Appendix A.................................................................................................................... 76 Appendix B. ................................................................................................................... 78 Appendix C. ................................................................................................................... 82 3 Costs and Benefits of Labour Mobility between the EU and the Eastern Partnership Partner Countries Country Study: Ukraine ______________________________________________________________________ List of Figures Figure 1 GDP and inflation during transition ............................................................... 15 Figure 2a The real wage and its regional variation ...................................................... 18 Figure 2b The nominal and real wage; minimum wage .............................................. 18 Figure 3a Change in the structure of the economy ...................................................... 18 5Figure 3b Change in the employment structure ........................................................ 18 Figure 4a Geographic structure of goods exports ......................................................... 21 Figure 4b Geographic structure of goods imports ........................................................ 21 Figure 5 FDI inflow to Ukraine, cumulative ................................................................ 22 Figure 6 Education of the Ukrainian population ......................................................... 25 Figure 8a Average duration of trips in 2005-2008 ..................................................... 37 Figure 8b Average number of trips in 2005-2008....................................................... 37 Figure 9 Legal status of Ukrainian migrants................................................................ 38 Figure 10a Distribution of migrants by employment sector ........................................ 40 Figure 10b Distribution of migrants by occupation
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