A new KSE Institute study examines how Ukraine’s population could change through 2041, what these demographic trends mean for the civilian labor force by 2030, and how fast productivity would need to grow for the economy to reach the GDP levels projected by KSE Institute.
In the central case, Ukraine’s civilian labor force could fall from 12.9 million at the start of 2026 to 11.9 million by the end of 2030, an 8% decline. Even with substantial returns from abroad and fast veteran integration, the number of people working or actively looking for work would remain below its 2026 level. To reach the projected GDP figures with fewer workers, GDP per civilian worker would need to grow by an average of 5.1% a year in 2027–2029, more than 2.5 times the average annual growth rate of 1.9% recorded in 2011–2021.
According to KSE Institute estimates, around 29.4 million people lived in the parts of Ukraine under government control at the start of 2026. The population of these areas has fallen by approximately 4.3 million, or 13%, since the start of 2022, mostly because of emigration. Another 6.5 million Ukrainians lived abroad, excluding those in Russia and Belarus. By January 1, 2041, the resident population in government-controlled Ukraine could fall to 26.7 million in the optimistic scenario, 25.0 million in the moderate scenario, and 22.3 million in the pessimistic scenario. The population declines in all three scenarios, primarily because deaths continue to outnumber births. It is also aging. In the moderate scenario, the number of people aged 15–64 falls from 19.6 million in 2026 to 16.4 million in 2040.
Migration is the largest source of uncertainty. The central labor-force projection uses the moderate demographic scenario, which assumes an unstable ceasefire after 2027, alongside the report’s “realistic” veteran-integration assumptions. About one-third of refugees are assumed to return over a 13-year period beginning in 2028. By the end of 2030, returns from abroad could add approximately 500,000 people to the civilian labor force, offsetting about one-third of the decline that would otherwise occur. The study estimates that around 46 out of every 100 people returning by that time would be working or actively looking for work.
The end of the war could also bring a new wave of emigration. Under the moderate scenario, around 600,000 people could leave Ukraine in 2028, while approximately 400,000 would return. This includes a one-off post-war wave of emigration driven by family reunification and previously deferred departures, alongside ordinary labor and family migration. Returns would exceed departures only in 2029.
Veteran integration will also affect the size of the civilian labor force. Depending on how quickly veterans enter the civilian labor market after demobilization, the labor force at the end of 2030 could differ by around 200,000 people.
Under a more favorable combination of return and veteran-integration scenarios, the civilian labor force would still fall to around 12.2 million by the end of 2030. This assumes that half of refugees eventually return over 13 years and veterans enter the labor market quickly. Under a less favorable combination, with a 15% return share over the same period and slower veteran integration, the civilian labor force could decline to 11.5 million.
A shrinking civilian labor force is a major constraint on Ukraine’s post-war economic growth.
The researchers compared their demographic projections with the updated GDP forecast in KSE Institute’s Ukraine Macroeconomic Handbook (Q4 2026), which assumes the war ends in the second half of 2027. The Handbook projects a 0.6% contraction in real GDP in 2027, followed by growth of 4.4% in 2028 and 5.0% in 2029. Given the projected decline in civilian employment, GDP per civilian worker would need to grow by 7.2% in 2028 and 6.4% in 2029.
The study calculates the productivity growth needed to reach these GDP figures rather than making a separate productivity forecast. The 5.1% annual average is a lower bound because GDP also includes defense output, which would decline as the number of personnel in Ukraine’s Defense Forces falls under the scenario.
The researchers conclude that returns from abroad and veteran integration would slow the decline in the civilian labor force but could not reverse it. Ukraine will also need to increase labor-force participation and invest in technologies that allow the economy to produce more with fewer workers.
The study recommends building on the experience of the Brave1 defense-technology cluster, which has awarded more than 1,000 grants worth UAH 6.2 billion since April 2023. Its approach of providing rapid grants, testing technologies with end users, and supporting start-ups could be extended to dual-use technologies for civilian industries, including agriculture, logistics, energy, and communications.
Another priority is preparing programs for veterans before mass demobilization begins. These should include medical and psychological rehabilitation, retraining, recognition of skills acquired during military service, and incentives for employers to hire veterans. Such programs should also be available to other groups facing barriers to employment, including people with disabilities, internally displaced persons, older workers, and the long-term unemployed.
More women, older people, and people with disabilities could also be brought into the labor force. The researchers estimate that a one-percentage-point increase in participation could add around 200,000 people. Affordable childcare and eldercare, flexible working arrangements, and adapted workplaces would help.
Encouraging Ukrainians to return from abroad and preventing further emigration are closely linked goals. Better job prospects and higher wages could encourage Ukrainians to return and discourage further emigration. The authors also propose considering temporary tax incentives for Ukrainians who return and take up formal employment. They stress that this proposal requires further discussion, particularly regarding fairness to Ukrainians who remained in the country during the war.
The study uses a population estimate for the parts of Ukraine under government control at the start of 2026 and a demographic model that accounts for births, deaths, migration, mobilization, and demobilization. It develops population projections through 2041 and civilian labor-force scenarios through 2030. The scenarios depend on their underlying assumptions and are not predictions of future outcomes. The estimates exclude the population of temporarily occupied territories and Ukrainians in Russia and Belarus. The projection does not model the migration of foreign nationals.
