The trends of migration processes in the labour market of the Donetsk region

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Senior Lecturer at Management Department Mariupol State University

The trends of migration processes in the labour market of the donetsk region

Perepadya Fedir

Since Ukraine is the largest country in Europe and one of the largest countries in terms of population, it definitely has a huge labour potential, which is a major factor of its economic development in today's realities. But the events of recent years that challenged the economic well-being and political independence of our country have prompted a number of complex macroeconomic processes, including exacerbated the problem of transformations of labour migration processes. This problem is especially acute when determining the future course of domestic economic policy, the need to revive the infrastructures of the regions affected by the hostilities and the hanging of the standard of living of the population. The negative impact of labour migration on the development of the labour potential of the country is one of the priority problems that must be solved in the near future.

Labour migration today is an integral part of the open development of national economies of states around the world. The dominating motives of labour migration are, as a rule, economic and demographic factors, causing the predominance of internal or international migration flows of the working-age population. As a result of these processes, various by its nature macroeconomic transformations may occur not only in the economic area but also in social, cultural, and other spheres of the government policy. Therefore, the role and importance of labour migration of the population, from the point of view of settling the main state priorities and managing national economic security, are extremely high today.

Awareness of the scale and depth of crisis processes in the Ukrainian economy for the last years has prompted the immediate need for the implementation of complex regulatory measures, which should lead to a balance of socio-economic relations inside. For the regulation of the internal labour market, we should say there are main tasks such as to organize the outflow of labour resources, to restore the viability of the backward regions, and to revive the proposal in the regional labour market in a number of key areas, and many others.

Literature review. Problems of labour migration are widely considered in the works of such famous scientists and researchers as I.M. Schkola, V.M. Kozmenko, O.S. Kvasha, S. Olimova,

O.Y Postol, O.V Sosin, O.I. Zamora, and many others.

The informational and analytical base of the conducted research is the official statistical data of government services and specialized agencies of Ukraine, in particular, State Statistic Service, Ministry of Social Policy of Ukraine, State Migration Service of Ukraine, and others, scientific researches and statistical analysis relevant to these processes. Using widespread methods for statistical analysis of macroeconomic indicators and economic modelling on the principle of system combination of national market processes, it was possible to identify key trends in the labour market in Ukraine and Donetsk region, to consider the nature and scope of migration processes, and their impact on the economy.

Objectives. The main purpose of this paper is to identify the current state of labour market development in the Donetsk region of Ukraine. Taking into account the national trends in the field of economic and comparing them with regional statistics, we can identify the main areas of risk and key features of the region under consideration. To achieve the research objectives mentioned above, three primary research questions can be addressed as follows:

What are the defining trends of development that relevant to the current labour market situation in Ukraine and Donetsk region?

What factors have an effect on the dynamics of migration processes in the Donetsk region most?

What systemic steps in the field of state regulation and in the civil sector should be taken in order to improve the current situation of the labour market of the Donetsk region?

Identifying the answers to these questions will allow more accurately formulating proposals for the improvement of the state regional policy aimed at overcoming the crisis in the sphere of employment and resuming a positive balance of labour migration in the Donetsk region. The growth of the labour market is necessary to ensure regional programs of economic development, to overcome the problems of social protection of the population who suffered as a result of hostilities on the territory of the Donetsk region.

Methodology. As is known, the regional labour market is influenced by many factors that are different in nature, among which are the level of development of the economy and the production sector and the services sector in the region, the state of technical and scientific potential, the dynamics of innovation processes, investment attractiveness, and many others. Labour migration flows of the population are also a significant and largely determining factor. Their nature may be different, but as a rule, it is customary to single out the economic, social, and demographic prerequisites for labour migration. Although the migration processes at the domestic or international level have a common nature, they differ in their consequences. Domestic migration carries potentially less risk to the country's economy as a whole since it allows preserving labour potential and opportunities for the development of key production and service sectors [1]. The definition of the key trends of the labour market and the migration of the population in the Donetsk region is realized by:

S determination of key parameters of the labour market such as changes in the number of the economically active working population, growth of unemployment, study of the job market and the dynamics of demand and supply of qualified and unskilled personnel in the regional market;

S assessing the dynamics of migration flows, reviewing their structure, and conducting a preliminary measure of the qualitative indicators of the outflow and influx of labour in the region;

S finding ways to prevent the outflow of youth, students, and highly qualified personnel, the creation of a strategically based program for the development of young professionals, and the development of labour potential;

S identification of key investment areas, involving the maximum use of human potential, qualified personnel, and the revival of industrial production complex as the main strategic component of the regional economy.

Main part. Starting in 2014, the labour market in Ukraine began to experience serious difficulties caused by both internal and external negative factors mostly connected to external aggression and the beginning of the ATO in the Donetsk and Luhansk regions of Ukraine. In connection with the exacerbation of problems in the domestic economy, there was a decrease in the number of the economically active population and an increase in unemployment. For the period from 2013 to 2016, the number of staff decreased by 2 million, and self-employed - by 2.5 million [2]. According to various staffing agencies and static services, today, up to 5 million Ukrainians work abroad [3]. The main countries where labour resources from Ukraine migrate are Poland, the Czech Republic, and Hungary. In general, these trends create a rather dangerous situation in the domestic labour market in Ukraine. The following Figure 1 shows the dynamics of key indicators of the state of the domestic labour market in Ukraine in the period of 2010-2018.

As can be seen from the above data, a significant sharp decrease in the number of the economically active population of Ukraine began in 2015 and, of course, that was the result of the loss of control over part of the territory and population of the Donetsk region. Also, we should take to account the military actions in the territory of the state, as well as the subsequent socio-economic crisis that followed. The difference amounted to 1.639 million people, which in turn is 8.6% of the total economically active population of the country. Also in 2014, the growth rate of the number of unemployed people of working age was 22.3%, which caused serious internal changes in the labour market. The situation began to gradually level off in 2016-17, and already in 2018, we can observe some small positive changes in the dynamics of both indicators: the increase in the total number of employed and the gradual decrease in the amount of unemployed population - by 1.3% and 7.1% respectively.

Figure 1. The overall dynamics of the amount of able-bodied population in Ukraine in 2010-2018, thousand people [2]

What are these trends for the Ukrainian economy as a whole given the current problems of labour migration? The following negative consequences can be identified:

A decrease in the economically active population, and therefore, a decrease in the labour potential, since the country is left, above all, by the most competitive personnel, this can ultimately welcome a substantial loss of human capital, knowledge, and experience.

The aging of the economically active population is due to the fact that as a rule, workers aged 19-30 years old leave the country, whose share is at least 60% of the total number of labour migrants.

A potential threat is that a large part of the country's migrant population receives low-skilled work abroad, which leads to a loss of professional skills and the inability to recover losses by the time the migrants return to their homeland.

There is also an unconditional problem of shortage of personnel, especially in high-tech industries with the most perspective and potential for development.

Regarding the Donetsk region, all these problems remain also relevant, but one more important factor is added to them - the problem of reviving the region's economy, restoring stability and security, without which further development is impossible, including the labour market [4; 5]. Due to the actual complex socio-economic and humanitarian situation, Donetsk region suffered significant economic losses, which led to a sharp decline in the standard of living of the population, security and the ability to carry out work activities.

In the scientific community, they consider various factors in their nature that contribute to the growth of outgoing migration flows, among which economic, social, cultural, geographic, mental, etc. can be distinguished [1]. The predominant role of each type of factors leads to completely different consequences of labour migration, and this problem should be solved accordingly.

Table 1 below presents the main statistical data on the dynamics of the labour market in the Donetsk region.

Table 1 The main indicators of the labour market in the Donetsk region [2; 6]

One of the main factors that resulted in a temporary outflow of labour resources from the Donetsk region was a catastrophic decline in the number of active enterprises on territories controlled by Ukraine and, accordingly, the total number of jobs in the region in the period of 2014-2017. According to statistical facts, the total number of enterprises in the Donetsk region in 2014 decreased by almost 60% (from 28731 to 11366). In general, the number of large enterprises decreased by 47%, the average by 51%, the small by 61%, and the microenterprises by 62%. It was a catastrophic blow to the internal labour market and this became the main catalyst for growing labour migration processes in the region. During 2018, the status of the unemployed was 43.4 thousand people, which is 12.9% less than the previous year, employed - 18.0 thousand people, by 16.9% less. The number of vacancies in comparison with the beginning of the year increased by 16.4% and as of 01.01.2019, it was 765 units. Beginning in 2014, a steady trend towards an outflow of labour from the Donetsk region is emerging, which has led to a sharp decline in production figures in key regional economies, a decrease in tax revenues, and a gradual increase in supply on the domestic employment market. Figure 2 shows the dynamics of the balance of internal migration of the population of the Donetsk region in 2010-2018. It is worth noting that in 60% of cases the registration of migratory phenomena is difficult due to the lack of registration of temporary displaced persons or the lack of official employment, which significantly reduces the indicators of official statistics.

Figure 2. Migration balance of the population of the Donetsk region in 2010-2018, persons [2]

Since 2015, the region confidently ranks first in the country in terms of the total unemployed population. Given the prevalence of industrial and agricultural sectors in the structure of the regional economy, the problem of aging personnel is becoming even more urgent. The average age of workers in the industry exceeds 42 years, in agriculture - 40 years, these are very high indicators [6; 7]. The rapid outflow of population from the Donetsk region is the most rapidly developing problem in view of the future prospects for overcoming the economic and demographic crisis. However, there is every reason to consider 2018 as a turning point in terms of the revival of profitability of enterprises in the Donetsk region since during the first 9 months of 2018 a positive financial result was obtained from ordinary activities before taxation of 4.8 billion period last year, 27.3 billion UAH were received. The share of loss-making enterprises decreased by 1 percentage point and amounted to 41.1%. And in the place where are many profitable enterprises, there is always a surge of labour resources.

The most important step towards solving the problems of labour migration in the Donetsk region should be a balanced and well-defined government policy to regulate the employment and migration processes. It is possible to systematically divide the complex of managerial influence on the spheres of internal and external migration of the population as described in Figure 3. It should include the methods of the state governance mechanism and private initiatives and social projects also.

Figure 3. Migration balance of the population of the Donetsk region in 2010-2018, persons [2]

The above model is a systemic tool of targeted influence on migration processes in the Donetsk region. With its help, it is possible to consider probable solutions to problems with external and internal labour migration at the state management level. Identifying two key areas of labour migration allows us to consider separately the prerequisites and possible solutions since they can be quite different. It is also necessary to note the key characteristics of the methods for implementing this model - they can be different in their properties and approaches:

short-term methods are aimed at settling primarily seasonal or situational cases of migration associated with the influence of a number of individual factors, which can be eliminated locally or their influence can be weakened for some time; long-term methods imply the existence of strategic initiatives related to the introduction of structural changes in the regional economy, including strict regulation of the labour market, the formation of a system of strategic priorities for the development of the labour market, supply and demand for it, etc.;

direct and indirect impact methods imply a communication link between the region's labour resources and the state apparatus, such as the state employment service, private employment agencies, public and socially-oriented organizations;

it is expected to affect both individual able-bodied citizens (privately) and individual social groups and regional societies that have similar standards.

In our opinion, the most relevant solutions aimed at overcoming the negative impact and growth of labour migration of the population are the following:

Creation of new jobs at the expense of both existing and newly created enterprises. This is possible only by opening the market for investors, creating favourable conditions for the development of private small business through affordable lending, rent, leasing models, etc.

The most important factor in overcoming the problems of labour migration in the domestic market is the formation of a powerful system of retraining and reorienting of staff, which would allow not only settling the balance of individual professional groups but also implementing flexible regulation of the labour market.

Improving living conditions is also an important element of the system for restraining internal migration since, at the regional level, labour flows significantly respond to domestic and general working conditions, the level of the decision of domestic problems and the availability of opportunities for life, child-rearing, safety, and healthcare.

Speaking about the problem of external labour migration, we, first of all, face a number of complex barriers that directly contribute to the strengthening of migration processes. These include, above all, the introduction of a visa-free regime, which greatly facilitated the process of finding temporary work abroad, the geographical proximity of individual regions to more developed regional labour markets, radiation, and the mentality of the population. According to many researchers, external migration is not only economically dangerous, because its main danger lies also in the leakage of intellectual capital from Ukraine, so according to specialists, Ukrainian migrants have the highest percentage of higher education in Europe - 37%. Thus, solving the problem of external labour migration is much more important from the point of view of the geopolitical and economic prospects of our state. labor migration regional employment

Conclusions. Summing up the study, it should be noted that labour migration is not a negative phenomenon that brings problems by itself. There are a number of positive aspects of labour migration, such as improving the quality of labour due to increasing competition, information technology exchange, and maintaining the principles of market regulation in the field of employment. This problem cannot be solved solely by the efforts of state regulators since the restoration of economic stability in the region requires the participation of key business players, the private sector, small business development, activation of public and charitable organizations, etc. However, having considered the statistical and methodological data on the state of migration processes in the Donetsk region, it can be asserted that these processes represent a direct threat to the economic and demographic security of the region. In order to prevent the negative effects of migration on the labour market in the Donetsk region, it is necessary to consolidate efforts in all areas to regulate the social and economic conditions of employment. The main platform for the development of the labour market and overcoming the crisis of labour migration of the population is the Program of Economic and Social Development [10] and a number of other legislative and administrative initiatives being introduced today. In general, proposals for overcoming migration problems in the Donetsk region of Ukraine can be presented in the form of several blocks, dividing them into the following:

Economy. The economic potential of the region is still quite high, despite the extremely difficult situation and security gaps. In the sectorial section, there is a forecast for increasing production of coke, refined petroleum products by 9.3%, mining and quarrying - by 9.5%, chemicals and chemical products - by 12.4%, machinery - by 7.6%.

The level of the average monthly wage in the Donetsk region in 2017-2018 is the highest in Ukraine (with the exception of the capital, Kyiv), which proves the existence of economic incentives for workers. According to the income level of the population of the Donetsk region, it ranks as 5th in the country. At the same time, a negative argument may be the existence of arrears of wages, which in the region is 17% of the national debt in 2018. The development of internal infrastructure, the creation of new jobs will undoubtedly serve as a vital factor for the economic stimulation of the influx of labour.

Education. While in Ukraine as a whole the number of applicants for vacancies of managers, lawyers, and economists is 7-12 times higher than the real need for them; in the market of technical professions, there is an excess of demand over labour supply. The most in demand in the labour market are representatives of technical professions, masters of work with the tool, workers in the sphere of agriculture. In the Donetsk region, where the prevailing development is based on industry and metallurgy, there is a developed complex of educational institutions aimed at meeting the needs of professional workers in the technical sphere. In 2018, there are 45 state vocational schools, the contingent of students is 10,0 thousand pupils. This determines the availability of the necessary training capacity for the preparation of appropriate personnel. The priority is the creation of flexible training systems, advanced training courses, retraining, obtaining a second profession on a subsidy basis, etc., the formation of new competitive specialties that are focused on regional specifics, which will allow students not only to find a new job without any problems but also to receive high wages.

Innovation

The traditional industries prevailing in the region - metallurgy, heavy industry, and agriculture are also in many ways a limitation for professional and creative development, especially for young people. However, in recent years, the situation has begun to change since the annual growth in the share of the services sector, including trade, hospitality, tourism, information and high technologies has been observed in the structure of regional economics. The region is distinguished by a favourable geographic location, unique natural and biological resources, access to the sea, and developed tourist infrastructure. This should be a significant factor in attracting young people and keeping them from labour migration for professional reasons.

Security and return to a peaceful life. The stabilized situation in the region over the past few years has helped increase the pace of industrial activity, expand the range of social problems to be solved, and the safety and security rating in the region has increased. Despite the persistence of tension on the line of demarcation, there are observed processes of the revival of socio-cultural and social processes, the effectiveness of the work of law enforcement agencies is increasing, the crime rate is constantly decreasing. This process is not fast and will require many years of recovery, but the positive trends of recent years indicate the desire of the displaced persons to return to their homeland and this requires preparatory work [10].

The most important condition for the successful revival of the Donetsk region is stable state financing, attracting investors, including foreign ones, for the implementation of longterm projects for the welfare and development of the region's infrastructure. An example of such acts is international cooperation, as a result of which development and construction are carried out in key cities of the region such as Mariupol, Kram- atorsk, Pokrovsk, and Sloviansk. According to official data for 2018, about 10.2 billion UAH were spent in the Donetsk region on the implementation of the Program of Regional Development for the year, which is 5 times the amount of financing in 2015 and 65% more than in the previous year. It should also be noted that the substantial growth of the state financing of the development program in 2018 - 1.6 billion UAH, which is twice as much as in 2017. All this is a good platform for the socio-economic development of the Donetsk region in the near future and, as a result, overcoming the problems of labour migration of the population, the return of people home, and the restoration of regional infrastructure. It needs to be clearly understood that labour migration is the most influential factor in increasing the efficiency of the regional labour market in view of the growing financing and support of key areas of the Donetsk region. Therefore, the issue of the return of labour migration flows must be solved in advance in accordance with the national interests of Ukraine and the strategic programs of the revival of the Donetsk region.

References

1. Kvasha O.S. External Migration Processes of Labor Resources: factors, condition and implications for Ukraine. Economy and Society. 2017. 10-201, pp. 535-540.

2. Olimova Saodat. The Impact of Labour Migration on Human Capital: The Case of Tajikistan. Migrations en Asie centrale et au Caucase. 2010. Vol. 26, n 3, pp. 181-197.

Summary

The article discusses trends in the development of labour migration processes in the Donetsk region, substantiates the prerequisites for enhancing these processes in recent years, and analyses possible consequences for the regional employment market in the future. Migration processes in normal conditions are a natural socio-demographic phenomenon on a regional scale, which is balanced by internal changes in the economy and related spheres of life. However, in conditions of a crisis of changes in the internal demographic balance in the region, labour migration of the population, which has anomalous dynamics, can lead to serious destructive consequences, both economic and social. The relevance of this work lies in the formation of a theoretical and practical point of view in resolving the negative consequences of the intensification of labour migration activity in the Donetsk region, identifying key areas for overcoming the current crisis situation. It was determined that the intensity and nature of migration flows in the Donetsk region are influenced by a number of internal and external factors of a different nature. Based on the above statistical data, key trends in the development of internal and external labour migration are highlighted; the author suggests ways to solve this problem by introducing an integrated model for regulating migration flows both at the regional level and the state as a whole. Methods to prevent the growth of the negative balance of labour migration of the population include elements of state policy and possible actions by private and public organizations, institutions, and associations aimed at improving the labour market, improving living conditions, creating a flexible system of retraining and reorientation of staff, development of regional mechanisms for regulating employment.

Key words: labour migration, labour market, wages, internal and external migration flows.

У статті розглянуті тенденції розвитку процесів трудової міграції населення Донецької області, обґрунтовані передумови посилення цих процесів в останні роки і проаналізовано можливі наслідки для регіонального ринку зайнятості в майбутньому. Міграційні процеси в звичайних умовах є природним соціально-демографічними явищем в регіональному масштабі, яке балансується внутрішніми змінами в економіці і суміжних сферах життєдіяльності. Однак, в умовах кризової зміни внутрішнього демографічного балансу в регіоні, трудова міграція населення, що має аномальну динаміку, може призвести до серйозних деструктивних наслідків як економічного, так і соціального характеру. Актуальність даної роботи полягає в формуванні теоретичної і практичної точки зору в питаннях врегулювання негативних наслідків інтенсифікації трудової міграційної активності в Донецькому регіоні, визначенні ключових напрямків подолання кризової ситуації. Визначено, що на інтенсивність та характер міграційних потоків в Донецькій області впливає цілий ряд різних за своєю природою факторів внутрішнього і зовнішнього середовища. На основі наведених статистичних даних виділені ключові тенденції розвитку внутрішньої і зовнішньої трудової міграції, запропоновані авторські шляхи вирішення даної проблеми шляхом впровадження комплексної моделі регулювання міграційних потоків, як на рівні регіону, так і держави в цілому. Методи запобігання зростанню негативного балансу трудової міграції населення включають елементи державної політики і можливі дії з боку приватних і громадських організацій, інститутів і об'єднань спрямовані на оздоровлення ринку праці, поліпшення умов життєдіяльності, створення гнучкої системи перенавчання і переорієнтації персоналу, розвиток регіональних механізмів регулювання зайнятості населення. Донецький регіон володіє достатньо високим виробничим потенціалом, який в мирних умовах можна буде використати для відродження економіко-виробничої сфери, розвитку інфраструктури та невиробничого сектору економіки. Розглянуті питання трудової міграції не лише дозволяють зробити аналіз актуальних трендів розвитку ринку праці в Донецькому регіоні, але й акцентувати увагу на майбутніх проблемах, пов'язаних із поверненням трудових мігрантів та забезпечення обсягів попиту та пропозиції на регіональному ринку у відповідності до вимог часу.

Ключові слова: трудова міграція, ринок праці, заробітна плата, внутрішні та зовнішні міграційні потоки.

В статье рассмотрены тенденции развития процессов трудовой миграции населения Донецкой области, обоснованы предпосылки усиления данных процессов в последние годы и проанализированы возможные последствия для регионального рынка занятости в будущем. Миграционные процессы в обычных условиях являются естественным социально-демографическим явлением в региональном масштабе, которое балансируется внутренними изменениями в экономике и смежных сферах жизнедеятельности. Однако, в условиях кризисного изменения внутреннего демографического баланса в регионе, трудовая миграция населения, имеющая аномальную динамику, может привести к серьёзным деструктивным последствиям как экономического, так и социального характера. Актуальность данной работы заключается в формировании теоретической и практической точки зрения в вопросах урегулирования негативных последствий интенсификации трудовой миграционной активности в Донецком регионе, определении ключевых направлений преодоления сложившейся кризисной ситуации. Определено, что на интенсивность и характер миграционных потоков в Донецкой области оказывает влияние целый ряд различных по своей природе факторов внутренней и внешней среды. На основе приведенных статистических данных выделены ключевые тенденции развития внутренней и внешней трудовой миграции, предложены авторские пути решения данной проблемы путем внедрения комплексной модели регулирования миграционных потоков, как на уровне региона, так и государства в целом. Методы предотвращения роста отрицательного баланса трудовой миграции населения включают элементы государственной политики и возможные действия со стороны частных и общественных организаций, институтов и объединений направленные на оздоровление рынка труда, улучшение условий жизнедеятельности, создание гибкой системы переобучения и переориентации персонала, развитие региональных механизмов регулирования занятости населения.

Ключевые слова: трудовая миграция, рынок труда, заработная плата, внутренние и внешние миграционные потоки.

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