Ukrainian refugees in eurozone could join workforce, ease labour shortage: ECB
Ukrainian refugees
The European Central Bank (ECB) on Monday (June 20) said that the arrival of Ukrainian refugees into the European Union could gradually solve labour shortage issues. ECB noted that some of those fleeing the war are likely looking to settle permanently.
Russia announced the invasion of Ukraine this year on February 24, with Moscow calling it special military operations. The Russia-Ukraine war led to the displacement of people on a very large scale.
According to the United Nations refugee agency (UNHCR), a total of 8.3 million refugees could have left Ukraine by the end of the year. More than 7.5 million have fled Ukraine and millions more have been displaced inside the country. Those who entered the neighbouring countries, hope to find durable employment opportunities in the 27-nation EU.
The situation is expected to benefit both, as the euro zone has been struggling with increasing labour shortages and on the other hand, those who entered Europe, are looking for work. The ECB said that the influx of refugees could "slightly ease" labour market tightness.
The ECB said in an Economic Bulletin article: "Under all of the assumptions detailed thus far, back-of-an-envelope calculations point to a median increase of between 0.2% and 0.8% in the euro area labour force in the medium term."
"This corresponds to an increase of between 0.3 and 1.3 million in the size of the euro area labour force as a result of the Ukrainian refugee crisis," it added.
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The ECB further added that getting people to work may prove difficult due to administrative barriers. "Barriers to the labour market and other frictions remain significant impediments to refugees, making it difficult for them to integrate into host countries’ labour markets, especially in the short term," it said.
(With inputs from agencies)
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