Russia’s war in Ukraine has generated one of the largest labour supply shocks in recent history. From an estimated pre-war population of 41 million people, close to 6 million have now left Ukraine. This outward migration alone has reduced the country’s worker population by roughly 3 million people.

It has been compounded by the mobilisation of more than 700,000 Ukrainian citizens into the army. At least 55,000 Ukrainian soldiers had been killed in combat by July 2026 (this is likely to be an underestimate as many soldiers are missing in action), with 400,000 more wounded. Most of these people are working-age men.

By conservative estimates, Ukraine’s civilian casualties amount to almost 70,000 people, with the rate increasing over the past few months because of Russia’s extensive use of ballistic missiles. Millions of Ukrainian citizens in the east and south of the country also remain under Russian occupation.

In total, there has been a contraction of about 25% of the initial labour force in areas still under Ukrainian government control. This is a labour supply shock of extraordinary scale.

The shock to labour demand has been similarly severe. A massive, multidimensional reallocation has taken place as a result of the war, with most economic activity shifting to the western part of Ukraine, which is less exposed to air........

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