What will incentivise Ukrainian refugees to return home? Insights from an economist’s prediction.
The non-return of forced refugees could cost Ukraine’s economy $113 billion in GDP over 10 years, according to a forecast by the Economic Recovery Center. Currently, there are up to 4.7 million Ukrainians abroad, with about 1.5 million of them being of working age.
Regarding incentivising the return of forced migrants to Ukraine and whether it is a feasible task, economist Dariia Mykhailyshyna shared her views with Suspilne (in Ukrainian).
What will incentivise Ukrainian refugees to return home
“Several factors may encourage the refugees to come back. First and foremost, ending the war and ensuring a safe environment ranked as the top priority in surveys.
However, the reconstruction of infrastructure and housing in the most devastated cities is also critical, as many refugees are willing to return, but there’s nowhere to go. Offering vocational training courses or assistance in finding jobs in safer regions within Ukraine during reconstruction might be beneficial.
Another important factor is the post-war policies of the European Union. The question is whether EU member states will incentivise Ukrainian refugees to remain abroad or encourage them to return. Some countries like Switzerland and Ireland are already testing certain pilot schemes to encourage Ukrainians to return to Ukraine.
How much Ukraine may lose
“We made our own calculations about how much the Ukrainian economy could lose from the non-return of refugees. We calculated it as a percentage of annual GDP, and according to our calculations, it is from 2.5 to 7.7% of GDP per year. We plan to update these calculations soon, but these are quite large losses. And unfortunately, Ukraine will lose a large part of the country even under an optimistic scenario. This is a problem, and it is worth preparing for it.”
Economic benefits for EU countries
“The European countries could benefit from the Ukrainian workforce, as many EU nations face demographic challenges and labour shortages. Ukrainian refugees represent a valuable human resource, particularly due to their higher education levels and language skills, such as English and other foreign languages, compared to refugees from Syria or Afghanistan”.
Restoration of working capital in Ukraine
“Apart from the return of refugees, another probable solution for restoring the labour force in Ukraine would be attracting labour migrants from other countries. However, this option may only be viable after the war when the security situation stabilises. Raising the birth rate in Ukraine is low, and increasing it significantly within a few years is unrealistic”.
Labour migration can be a good solution, but there are certain complexities involved. It may be challenging to attract people from other countries when they have the option to go to European countries, especially if Ukraine’s security situation remains unstable. Therefore, changes in legislation and simplifying migration policies for other countries are necessary. But, of course, remembering safeguards regarding the migration of people from aggressor countries. Ukraine will benefit from this because we also need skilled and unskilled labour. That’s why it’s only a plus.”
Accession of Ukraine to the European Union
“Regarding Ukraine’s accession to the European Union, it could significantly impact the overall economic situation, but we should pay attention to 2 things. On the one hand, EU membership could improve Ukraine’s economic capital and situation, offering additional security guarantees for Ukrainians abroad. They would know that if they return to Ukraine, they can leave again at any time without the need for residence permits in the EU, which would make them more open to coming back.
On the other hand, EU accession also means opening the labour market in EU countries, allowing any Ukrainian to work there without any obstacles. As a result, there might be a potential issue where a certain number of Ukrainians might additionally choose to leave for the EU.”