Can you name the following country? (I know, it’s the second consecutive blog post I’ve started with a quiz, but sometimes these things happen.)
Between 1991 and 2011 the population decreased by nearly 12 percent.
High death rates due to smoking, accidents at work, and high incidence of suicides affect men in particular before they reach the age of 65. In 2011, life expectancy at birth was only 69.5, compared with 78.6 in the EU.
If you guessed Russia, you’re wrong. It’s Ukraine, which a new report by the Euromonitor research firm says will see the largest absolute decline in population in Europe through 2020.
That drop, from 45.5 million to 43.5 million, will come entirely among those under 65 (that age group will shrink by almost 3 million people, while the group over 65 will grow somewhat).
The shift will bring with it the usual problem of fewer people funding more pensions – the government raised the retirement age last year – but it will also lead to shortages on the labor market and higher wages.
To the many who are unemployed right now, that will be a welcome turnaround. That is, unless businesses start looking for less expensive places to operate. To deal with that challenge, the report says, Ukraine will have to move “toward higher value added activities” (in other words, toward jobs where the skills and contributions of the workers justify the higher costs).
Which brings us to education in Ukraine. Though it’s not a basket case, a 2009 report by the European Training Foundation said the country’s educational system has not adapted to the needs of the labor market “resulting in a substantial skills mismatch, weak involvement of the business community in education, outdated equipment and infrastructures, poor salaries for teachers, poor school management, and the absence of Ukrainian universities in international rankings.”
The report noted that the shift from the types of jobs that were prevalent before 1991 (in Ukraine, heavy manufacturing and agriculture) to positions brought in by a market economy (for instance in finance or small business) had been slower than in other transition economies.
I’m reluctant to quote statistics from the report, because they are pre-2008, and the world has changed much. But some of them illustrate trends that surely have not changed in only the four years since. For instance, “out of 888,000 graduates of vocational schools, colleges and universities in 2007,” the report notes, “53 percent and 15 percent received a university diploma and a college diploma, respectively, and only 32 percent received a vocational school diploma. Labor market needs are quite the opposite, however. Furthermore, many graduates tend to have professions that are not in demand or lack essential skills required by employers.”
If the Euromonitor research is right, the next decade could be an exciting one for young workers in Ukraine who are willing to train and re-train if necessary. Otherwise, we might witness the seemingly contradictory scenario of a smaller labor pool that ultimately results in fewer jobs.