Human capital is the main resource of the economy of the 21st century. In the modern world, those countries that have significant intellectual assets are characterised by a higher level of development and a better quality of life.

A negative migration balance over a long period of time, i.e. a phenomenon in which emigration from a country exceeds in migration to the country, is a significant threat to developing countries and economies in transition, as it often indicates a migration crisis. The latter in this case often includes the so-called “brain drain” or skilled emigration, which is a serious challenge for the state.

Russia’s full-scale military invasion on 24 February 2022, and the war it has been waging against Ukraine since then, have caused enormous damage to all areas of human life in Ukraine, including the educational process and the broader economy.

What follows in this article are two intertwined war effects: disruption of schooling and brain drain in the economy.

Brain Drain and Labour Market Disruptions

Russia’s full-scale invasion has created Europe’s biggest migration crisis since the Second World War, forcing more than 8 million Ukrainians to flee their homeland, according to UNHCR, and about 6 million to become internally displaced. For a country with a population of approximately 41 million (excluding the Autonomous Republic of Crimea), this is a huge outflow of human capital, even in quantitative terms.

In terms of quality, the assessment is similar. According to a UNHCR study conducted in August–September 2022, the majority of refugees (70%) had higher education and had a job before leaving (63%), with a variety of professional experiences. 

The OECD has similar figures.

For example, according to its data, a higher proportion of Ukrainians have higher education than other refugee groups. Thus, 71 % of respondents had completed higher education, 41 % had a master’s degree or higher, and another 11 % had completed vocational education.

Typically, brain drain refers to mass emigration in which a state loses highly qualified personnel (often engineers, doctors, scientists, and other university-trained professionals) for economic, political, personal or other reasons. For developing countries with economies in transition, such as Ukraine, brain drain is a problematic phenomenon due to the high level of emigration, and its negative impact is only increasing.

The negative effect of brain drain occurs when the share of skilled labour exceeds 5% of the migration rate. Despite the relevance of this issue, states generally do not keep records of intellectual migration. Therefore, it is impossible to estimate the real, statistically substantiated scale of the loss of personnel at the national level, let alone at the global or regional level.

The impact on the labour market has been huge. In recent history, there have not been comparable losses of life, destruction of assets, and the magnitude of migration. The initial shock in February–March 2022 led to a sizable drop in employment. Data from a survey from early March 2022 suggests that 75% of small businesses halted their work. Public transport in most cities temporarily stopped, and a massive exodus started from endangered territories. The effect was not so much a hike in unemployment as a record shrinking of the labour force: most people who lost their jobs were unable or unwilling to seek a new one, chiefly because of security concerns.

The difficult workforce situation affects business operations across Ukraine and threatens the country’s future reconstruction and growth prospects. According to an October 2024 survey by Ukraine’s Institute for Economic Research and Policy Consulting, labour shortages are the private sector’s top concern, with more than 60% of the companies consulted finding it difficult to hire qualified workers.

At the same time, recent estimates show that the current unemployment rate in Ukraine stood at 12.7% in late 2024, meaning unemployment coexists with labour shortages that reflect pervasive skills mismatches across regions and sectors of the economy.

One of the main problems is that unemployment turned largely structural: a lot of production assets were destroyed, damaged or occupied; millions of people had to leave their homes and move either within Ukraine or abroad, often to places where their skills and professions are not in demand. A large share of Ukraine’s workforce has emigrated, relocated within the country, enlisted in the military, or tragically become a casualty of the violence. Unpredictable changes to conscription and mobilisation of men have significantly compressed the labour supply.

As human capital is one of the primary drivers of economic growth, it is clear that the emigration of highly skilled workers can significantly impact an economy by reducing its productivity. Second-order effects are also thought to be significant.

For example, the productivity of remaining workers can suffer, especially if departing workers perform tasks that are highly complementary to other parts of the economy or are difficult to substitute for. Wages for the remaining highly skilled workers may rise, increasing costs. The most pernicious effects, however, may be observed in the long run: human capital is more difficult to replace than physical capital.

For example, academic emigration from Nazi Germany and deaths of academics in bombings during the Second World War diminished local research productivity for decades, while places that merely lost buildings and infrastructure recovered more quickly.

Education Gaps: A Generation at Risk

The Ukrainian government reported that from February 2022 through October 2023, 3428 educational facilities had been damaged and 365 destroyed. The attacks have had a devastating impact on Ukrainian children’s access to education during the war and likely long after, as the repair and reconstruction of schools, particularly amid other destroyed civilian infrastructure, will require major resources and time.

As of February 2026, UNICEF reports that more than a third of Ukraine’s children, 25,89,900, remain displaced as the war in Ukraine enters its fifth year. This includes more than 791,000 inside Ukraine and nearly 1,798,900 living as refugees outside the country. Of those displaced, 1 in 3 adolescents aged 15–19 reported moving at least twice. Safety was cited as the most common reason for fleeing.

Inside Ukraine, while more than 1.9 million children were accessing online learning opportunities and 1.3 million enrolled in a combination of in-person and online learning, recent attacks against electricity and other energy infrastructure caused widespread blackouts and left almost every child in Ukraine without sustained access to electricity, meaning that even attending virtual classes is an ongoing challenge.

The situation outside of Ukraine is also concerning, with an estimated 2 out of 3 Ukrainian refugee children not currently enrolled in the host country’s education system. There are several factors behind this, including stretched education capacities and the fact that, at the start of the crisis and throughout the summer, many refugee families opted for online learning instead of attending local schools, as they hoped to be able to return home quickly.

Global experience shows that education and, thus, future labour market outcomes will be negatively impacted by armed conflict. Households exposed to armed conflicts are typically unable to keep investing in education, and this will likely be the case for Ukrainian households. Evidence shows that the short-term losses in schooling are never fully recovered. For instance, in the case of Peru, early childhood exposure to internal armed conflict was associated with reduced educational attainment of 0.21 years, with a stronger impact on women.

In El Salvador and Rwanda, exposure to armed conflict reduced years of education by 0.5 and 0.6 years, respectively. Furthermore, the evidence has shown that affected individuals experienced sizable earnings losses even 40 years after the war, a result attributed to the educational loss caused by the conflict.

The reduction in educational attainment is detrimental to an individual’s ability to secure their livelihood throughout the rest of their lives. Children not able to go to school during the Ukrainian war will face persistent effects, as they will have lower earnings and be at higher risk of unemployment.

Regarding labour market effects, the evidence from previous conflicts shows that children exposed to a war are less likely to participate in the labour force in their adulthood, as was the case during the Salvadoran Civil War.

Rebuilding Human Capital: Policy Priorities

Wars cause enormous suffering to civilians and society. Most wars exert major direct and indirect costs. War causes destruction, which results in a decline of economic activity and GDP. War results in losses of human capital and declining prices of financial assets. War requires an increase in budget expenditure and a change in its structure.

Neighbouring countries are affected due to interruptions of labour mobility and transport, humanitarian disasters, and reduced trade and tourism. Unfortunately, many of these economic costs tend to be underestimated by policymakers.

At a global level, the consequences of the war in Ukraine require a multisectoral approach focused on protecting the human capital of current and future generations, like programmes related to social protection, food provision, education, and public health. All these policy responses will require fiscal policies that make programmes available while the conflict persists and are flexible to de-escalate them when the conflict ends.

The post-war recovery will require both funds to rebuild Ukraine after the war and reinvestment in human capital for the survivors of the conflict. The war’s increasingly indiscriminate targeting of physical, natural, and human infrastructure will require large investments for recovery. Alongside investments to rebuild basic physical infrastructure, a post-war recovery plan that includes the reinvestment of human capital for survivors should also be designed. Re-enrolment programmes targeting children who dropped out of school will be key.

On the labour side, social protection programmes will be needed to ease labour transitions in a post-war Ukrainian economy. Post-traumatic stress, as a negative and substantial consequence of war, is extraordinarily important in rebuilding the human capital that generates productivity and growth. This will be key to the work towards a socially cohesive and productive post-war Ukraine.

Even though the war in Ukraine is still ongoing, the Ukrainian government should already focus on facilitating the return of ideas, if not people. This will require experience in remote work during the pandemic as a way to attract human capital across geographical boundaries, and cooperation with the diaspora to stimulate investment, entrepreneurship, and knowledge exchange.

Another focus should be on retraining. Ukraine has the opportunity to reduce the future shortage of personnel in healthcare, construction, and other sectors by training new workers. Special attention in this area should be paid to veterans.

Ukraine should also utilise its existing strengths. The share of women with higher education is even higher than the corresponding figure for men, but participation of women in the labour force is lower than the EU average and has a tendency to decrease among some age cohorts. Creating conditions for women to increase their participation should be an important policy goal.

The war has already traumatised a lot of people (both military and civilian) and bringing them back to society, including creating inclusive workplaces, is very important. To fully achieve this is only possible after stable and lasting peace is established, although some measures or programmes can be implemented even now, from reconstruction with inclusivity in mind to an equivalent of the US post-WW2 G.I. Bill.

The CSIS identifies both short- and longer-term labour market priorities. In the near term: designing quick training programmes to increase labour force participation; modernising public employment services; reforming the Labour Code to provide more hiring flexibility; and launching targeted training for companies and business associations.

Over the longer horizon: developing a comprehensive national skilling strategy; targeted programmes for vulnerable groups including IDPs and veterans; modernising technical and vocational education and training (TVET); and developing a comprehensive immigration strategy to facilitate the return of refugees.