Employment of Displaced and Non-Displaced Households in Luhansk and Donetsk Oblasti

Abstract

This essay investigates the employment of displaced and non-displaced households in a region next to the conflict zone. We show that the casually observed average 0–5% difference in employment between displaced and non-displaced household heads conceals positive selection into displacement. Relative to locals, internally displaced persons are positively selected based on observable as well as unobservable factors. After controlling for personal characteristics, the structure of the household, location, non-labour incomes and endogeneity of displacement, heads of IDP households are still 20% less likely to be employed two years after resettlement.

Notes

1 ‘IDMC Grid 2017: Global Report on Internal Displacement’, IDMC Internal Displacement Monitoring Centre, available at: http://www.internal-displacement.org/global-report/grid2017/, accessed 24 October 2019.

2 ‘IDMC Grid 2019: Global Report on Internal Displacement’, IDMC Internal Displacement Monitoring Centre, available at: http://www.internal-displacement.org/global-report/grid2019/, accessed 24 October 2019.

3 According to the State Statistics Service, in 2017, 69% of the Ukrainian population lived in urban locations. The pre-conflict share of urban population in the conflict-affected area exceeded the country average: 91% in Donetsk region and 87% in Luhansk region (‘Demographic Yearbook. Population of Ukraine’, State Statistic Service, available at: http://www.ukrstat.gov.ua/druk/publicat/Arhiv_u/13/Arch_nasel_zb.htm, accessed 30 October 2019).

4 Self-defined by the interviewed respondents. Typically, the household's main income earner.

5 The Ministry of Social Policy of Ukraine, available at: https://www.msp.gov.ua/news/8449.html, accessed 30 October 2019.

6 ‘National Monitoring System Report on the Situation of Internally Displaced Persons’, International Organization for Migration and the Ukrainian Centre for Social Reforms, March 2018, available at: http://www.iom.org.ua/sites/default/files/nms_round_9_eng_press.pdf, accessed 24 October 2019.

7 ‘National Monitoring System Report on the Situation of Internally Displaced Persons’, International Organization for Migration and the Ukrainian Centre for Social Reforms, March 2018, available at: http://www.iom.org.ua/sites/default/files/nms_round_9_eng_press.pdf, accessed 24 October 2019.

8 ‘Nadannia poslukh vnutrishno peremishchenym osobam’, The State Employment Service, available at: https://www.dcz.gov.ua/sites/default/files/infofiles/1.sichen_2017.xlsx, accessed 30 October 2019.

9 ‘Nadannia poslukh vnutrishno peremishchenym osobam’, The State Employment Service, available at: https://www.dcz.gov.ua/sites/default/files/infofiles/1.sichen_2017.xlsx, accessed 30 October 2019.

10 ‘All-Ukrainian Population Census 2001’, The State Statistics Service, available at: http://2001.ukrcensus.gov.ua/results/regions/ukraine/, accessed 31 October 2019.

11 The Information Analytics Centre of the National Defence and Security Council of Ukraine, March 2014–August 2016, available at: http://mediarnbo.org/?lang=en, accessed 31 October 2019.

12 Spread out over the year.

13 So-called treatment models with endogenous treatment.

14 See Ehrenberg and Smith (1996) for a short description of this concept.

15 Generous social payments reduce work incentives and increase time spent unemployed. See, for example, Moffitt (2012).

16 Cabinet of Ministers of Ukraine Decree, No. 505, 1 October 2014, available at: https://zakon.rada.gov.ua/laws/show/505-2014-%D0%BF, accessed 31 October 2019; Cabinet of Ministers of Ukraine Decree, No. 535, 1 October 2014, available at: https://zakon.rada.gov.ua/laws/show/535-2014-%D0%BF, accessed 31 October 2019.

Additional information

Notes on contributors

Hanna Vakhitova

Hanna Vakhitova, Assistant Professor of Economics and Senior Economist, Kyiv School of Economics (KSE), Dmytrivska St, 92–94, 01135 Kyiv, Ukraine. Email: [email protected]

Pavlo Iavorskyi

Pavlo Iavorskyi, Research Associate, Kyiv School of Economics (KSE), Dmytrivska St, 92–94, 01135 Kyiv, Ukraine. Email: [email protected]