2005年-世界发展银行全球_Ukraine_Jobs_study___Fostering_Productivity_and_Job_Creation_Volume_1_52页_5mb

Ukraine Jobs Study Summary

Core Content

The Ukraine Jobs Study, conducted by the World Bank in 2005, aimed to assist Ukrainian policymakers in creating more and better jobs by analyzing labor market performance, identifying key constraints to job creation, and suggesting policy reforms. The study was carried out following the "Orange Revolution" and emphasized the need for structural reforms, improved investment climate, and labor market flexibility to support productivity and employment growth.

Main Findings

I. Labor Market Performance

• Ukraine's labor market is at an early stage of transition.
• Most employment is in the public sector, indicating a major reallocation of jobs and labor is yet to occur.
• Despite a relatively low open unemployment rate (around 8%), the labor market is depressed with scarce productive job opportunities.
• Low labor force participation (around 60%) is due to the "discouraged worker effect", where many workers have given up searching for jobs.
• "Jobless growth" has occurred, where economic growth has not translated into job creation, largely due to defensive restructuring by firms.
• Informal sector employment has increased, creating a significant portion of new jobs (nearly 60% of new jobs in 2002) and reflecting a poor investment climate.
• The services sector has become a major source of employment, but widespread informality in this sector limits its productivity.

II. Key Constraints to Job Creation

• Unfinished structural reforms and an inhospitable investment climate are the main causes of poor labor market outcomes.
• Policy uncertainty, corruption, bureaucratic red tape, and inefficient regulations inhibit firm entry and growth.
• High tax rates, especially payroll taxes, increase labor costs and discourage hiring.
• Employment protection legislation (EPL) is extremely strict on paper, but lax enforcement allows for de facto labor market flexibility.
• Low returns to education indicate that the labor market is still in an early stage of transition, with low demand for skilled labor compared to other transition economies.
• Wage rigidity persists, especially in public and privatized firms, and is linked to trade unions' influence and centralized wage determination.

III. Policy Recommendations

• Improve the investment climate by reducing policy uncertainty, corruption, and bureaucratic barriers.
• Promote firm entry and growth through incentives and better access to finance.
• Reform labor market institutions to create a more adaptable labor market, allowing for flexible employment relations and efficient job reallocation.
• Enhance wage flexibility to align wages with productivity, and reduce the wage gap between formal and informal sectors.
• Strengthen enforcement of labor regulations to ensure compliance and protect workers while maintaining market efficiency.
• Support the development of the private sector, especially small and medium enterprises (SMEs), which are the main source of job creation.
• Address skill mismatch by aligning education and training with the evolving demand for skilled labor.

Key Information

• Currency Unit: Hryvna (UAH), with 1 USD = UAH 5.05.
• Fiscal Year: January 1 to December 31.
• Key Data Sources:
  • Ukrainian Longitudinal Monitoring Survey (ULMS)
  • EBRD-World Bank Business Environment and Enterprise Performance Surveys (BEEPS)
  • Labor Force Survey (LFS)
• Main Constraints:
  • Inefficient regulations
  • High costs of doing business
  • Poor access to finance
  • Corrupt and uncertain policy environment
  • Weak employer representation
• Main Challenges:
  • Informal sector dominates job creation
  • High minimum wage with weak enforcement
  • Low wage flexibility
  • High union density and bargaining coverage
  • Skill mismatch

Conclusion

The study concludes that while Ukraine has a relatively low unemployment rate, the labor market remains depressed and inefficient, with limited job creation and low productivity. The informal sector plays a significant role in job creation, but this is a symptom of the poor investment climate and rigid labor market institutions. To foster productivity and job creation, Ukraine must reform its labor market institutions and improve the investment environment, creating a flexible and dynamic labor market that supports both employment growth and economic development.

Figures and Tables

• Figure 1: Employment is stagnant despite strong GDP growth
• Figure 2: Productivity improvements lead to higher wages
• Figure 3: New private sector is still small in Ukraine
• Figure 4: Private and small firms are the primary source of new jobs
• Figure 5: High demand for simple manual skills
• Figure 6: Job reallocation leads to better use of labor and productivity gains
• Figure 7: Employment rate is low in Ukraine
• Figure 8: Public sector restructuring has slowed down
• Figure 9: Informal sector is among the largest in the region
• Figure 10: Majority of jobs are in the services sector
• Figure 11: Minimum wage is high relative to regional standards
• Figure 12: Minimum wage accounts for a high percentage of market wages for low-skilled workers
• Figure 13: Trade unions are mostly present in large public and privatized firms
• Figure 14: Corruption, uncertainty, administrative barriers, and poor access to finance are seen as major obstacles
• Figure 15: Tax wedge on labor: Ukraine against other ECA countries (2003)

Appendices

• Annex 1: Comparative data on transition progress and labor markets
• Annex 2: Regression analysis of firm-level employment growth
• Annex 3: Regression analysis of wage determination
• Annex 4: Description of the Ukrainian Longitudinal Monitoring Survey (ULMS)

References

• World Bank reports: Risk and Vulnerability Study (2003), Country Economic Memorandum (2004), Poverty Assessment (2005)
• EBRD-World Bank Business Environment and Enterprise Performance Surveys (BEEPS)

Authors and Contributors

• Task Team Leader: Jan Rutkowski
• Sector Manager: Arup Banerji
• Country Director: Paul Birmingham
• Edited by: Imelda Mueller
• Background Paper Authors: Hartmut Lehmann, Olga Kupets, Norberto Pignatti

Disclaimer

This report is a product of the World Bank staff. The views and conclusions expressed are those of the authors and do not necessarily reflect the views of the World Bank or its Executive Directors. The World Bank does not guarantee the accuracy of the data included in this report.