Migration and investment as drivers of structural modernization in Ukraine’s economy

Abstract

This article examines the nexus between migration, the structure of external financial flows, and investment activity in Ukraine’s economy during 2021–2025. Using statistical data from the United Nations High Commissioner for Refugees, the International Organization for Migration, and national sources, the study shows that mass population displacement has created a structural imbalance between human capital and the stock of productive assets, increased the risk of workforce deskilling, and constrained the recovery of the domestic labor market. A significant share of Ukrainian specialists abroad is employed in low-skilled jobs, which undermines the return on educational investment and complicates future reintegration.
Macroeconomic analysis indicates that private remittances exceeded net foreign direct investment inflows by 2–11 times over the period. The share of FDI in nominal GDP declined to 0.9% according to preliminary 2025 estimates, pointing to a critical shortage of capital for fixed-asset renewal and job creation. Under these conditions, private transfers stabilize consumption and the balance of payments in the short term but do not provide a sustainable investment base for long-term growth. The results confirm that successful return migration depends on housing availability and stable employment, while the limited capacity of the domestic labor market increases the risk of repeated emigration.
The article identifies policy measures aimed at converting external financial inflows into domestic investment. Key instruments include preferential lending programs for small businesses with co-investment schemes for returnees, expansion of war-risk insurance through international financial institutions, development of industrial parks as regional investment anchors, and scaling up retraining programs aligned with investor demand. The combined implementation of these measures can reduce the gap between remittance inflows and real investment and facilitate productive integration of migrants into the national economy.
The study’s novelty lies in a comprehensive analysis of the interaction between migration flows and investment dynamics under wartime constraints. Its practical contribution consists in proposals for stimulating repatriation, mobilizing private savings into capital investment, and creating high-productivity jobs to support sustainable post-conflict economic recovery.