Estimation the Labor Force Replacement Demand in Ukraine, Caused by Its Outflow Due to the Age and Labor Migration

Abstract

The article describes an effective approach to the anticipation of the labor force demand caused by the need to it replace (the replacement demand). The emphasis is made on estimation the outflow of workforce due to the retirement and labor migration.  The importance of medium-term forecasting (for 10 years) of the labor force demand, caused by the need to replace the workers flowing out of the labor market as a whole and separate occupational or qualification groups in particular is justified in the Ukraine’s context. The data sources and methodological approaches to the anticipation of the replacement demand are highlighted. It is shown that the main source of data for the labor force replacement demand anticipation in Ukraine, like in many other countries, is the state labor force the sample survey. A serious problem for Ukraine is accounting of labor migration effects for the replacement demand, which is assessed by conducting ad hoc surveys. The main methods used in anticipation of the replacement demand are method of trend extrapolation, methods of pseudo-cohorts, and stock-flow modeling. These methods enable for assessing and accounting of not only the processes of outflow of the labor force due to the age, but also transitory processes reflected, inter alia, in changes of qualifications and/or professions by young people at the beginning of their carrier. A medium-term anticipation of the labor force demand in Ukraine, caused by outflow of the labor force due to the age and labor migration, is performed. It is shown that the replacement demand caused by outflow of the workers due to the age, accounts for a most significant part of the overall demand for workforce, making up in medium-term perspective nearly 13% of the total employment in 2017. The level of the demand has strong variations across occupational and qualification groups: in the occupational group “the simplest occupations”, the average annual demand caused by the outflow due to the age will be nearly 3.4% of the total employment. It is shown that the replacement demand in Ukraine by occupational group may substantially increase due to labor migration. Thus, the high replacement demand for workers in the simplest occupations is enhanced by the external labor migration of such workers, which share is nearly 42% of the total labor migrants.