Newsletter Edition 134 | December 2019

Labour migration from Ukraine: A mixed blessing

Significant changes in patterns of labour migration from Ukraine have occurred since 2014. There has been a direction change of migrant streams from East to West and an overall increase of labour migration. The total number of labour migrants from Ukraine in the beginning of 2017 was at least 2 million. Out of these, at least 500,000 were in Poland and a further increase of this migrant stock by 200,000 migrants per year in 2017 and 2018 appears credible. Remittances of labour migrants amounted to ca. USD 11 bn in 2018, around 8% of GDP.

Migration can have positive and negative economic effects: Positive, as migrants support household incomes with remittances and eased pressure on the labour market in a time of crisis. However, emigration could also lead to “Dutch disease”, a loss of competitiveness due to a real appreciation of the currency. Despite the strong increase in wages since 2015, no signs of Dutch disease exist so far and employment has been rising slightly. However, persisting emigration would eventually lead to Dutch disease as well as other dangers such as pressures on financing pensions.

Download Newsletter 134/2019