Competitiveness of regional labor markets as a determinant of international migration: A nexus empirical study

Abstract

A large-scale migration from Ukraine caused by russian military aggression has triggered new security challenges to the national and regional economies. The paper aims to assess the competitiveness of regional labor markets and examine its nexus with international out-migration (on the example of the Carpathian region of Ukraine). The research methods include a composite approach (assessment of labor market competitiveness), the theory of sensitivity (identification of degree of sensitivity of composite and partial indices to changes in indicators), nonlinear regression (determination of dependence of the international out-migration on labor market competitiveness), and econometric nonlinear optimization (calculation of critical values of migration). The information and analytical basis comprises indicators reflecting the development of labor markets and international migrations in the oblasts of the Carpathian region in 2008–2021. The study reveals that the level of labor market competitiveness in the region mainly remained below the national average. Two groups of indicators dominated the structure of composite indices of labor market competitiveness in the region’s oblasts: institutional capacity (indicators measuring the ability of regulatory institutions and labor market entities to provide adequate support to the unemployed and promote employment) and labor motivation (wage and income indicators). Only Lviv oblast demonstrated resilience and growth of competitiveness, which was reflected in moderate out-migration. Meanwhile, the intensity of international out-migration in Zakarpattia and Chernivtsi oblasts (with worse labor market parameters) exceeded the estimated critical values. The paper confirms that low competitiveness of the labor market is a factor increasing migration losses. AcknowledgmentThis study has been conducted with the support of the Virtual Ukraine Institute for Advanced Study (VUIAS) Fellowship Programme, 2023/2024.