Rising Poverty in Ukraine: How the War Has Affected Household Incomes

The war has radically altered the financial situation of Ukrainians, depriving millions of citizens of a stable income. Demographers are reporting a dangerous spike in the poverty rate to 30% and warning of long-term unemployment. Find out who will come to rebuild the economy and why we may have to work until age 70

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Full-scale hostilities have dealt a severe blow to the country’s economy and the financial well-being of its citizens. Despite businesses adapting and support from Western partners, the standard of living continues to decline. Ella Libanova, Director of the Institute of Demography and Social Studies at the National Academy of Sciences of Ukraine, notes that the economic consequences of the war, including rising unemployment and demographic changes, are radically transforming the labor market and the social sphere.

What percentage of Ukraine’s population lives below the poverty line?

Before the full-scale invasion, even during the crisis of the COVID-19 pandemic, the poverty rate in the country remained at 22–23%. Today, however, this figure has risen sharply and now stands at around 30%.

The sharp drop in household incomes could have led to even more severe consequences had it not been for unprecedented financial injections from international partners. According to Ella Libanova, it is external support that is keeping the Ukrainian economy afloat. The expert emphasizes that without systematic financial aid from Europe, the situation would be critical, and the state would be unable to fulfill its basic obligations.

Unemployment in Ukraine During the War: Why It’s Hard to Find a Job

Although some businesses have adapted to the realities of war, the country is grappling with the problem of so-called stagnant unemployment—a situation where citizens cannot find suitable employment for an extended period.

Vulnerable groups face the greatest difficulties. The modern labor market is changing rapidly, yet far from all Ukrainians are ready or able to retrain to meet employers’ new demands. According to estimates by the Institute of Demography, a massive potential labor reserve has formed in the country—about 1 million people. This figure includes people who have stopped looking for work due to various objective circumstances or a subjective reluctance.

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Labor Shortage in Ukraine: Who Will Work After the War?

Paradoxically, while some segments of the population face high unemployment, Ukrainian businesses in other sectors are already experiencing a severe shortage of specialists. It is projected that this labor shortage will only intensify during the post-war recovery period.

To address the labor shortage, Ukraine will have to recruit workers from abroad. It is expected that after the war, two main categories of foreigners will flood the domestic labor market: labor migrants from the world’s poorest countries to perform unskilled or physically demanding work, as well as highly qualified engineers needed for the large-scale restoration of destroyed infrastructure and the launch of complex manufacturing operations.

Raising the retirement age: how long will Ukrainians have to work?

Large-scale demographic shifts and economic transformation will lead to a de facto increase in the retirement age in Ukraine. This is not just about potential changes in legislation, but also about the real need for people to remain economically active for much longer.

Demand for the experience and qualifications of senior specialists will steadily rise in the labor market. Ella Libanova notes that society is moving toward a model where the duration of working life will significantly increase. In her view, in the future, Ukrainians will work until at least age 70, and in some cases, the limits of active employment may extend to age 90.

Reminder! The Cabinet of Ministers plans to completely overhaul the principles for calculating pension payments in the near future. The old model will be replaced by a three-tier system and voluntary savings with automatic enrollment. How will work experience be calculated, and when will the law be passed? Find out all the details of the upcoming pension reform.

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