Methodological Approach to Assessing the Efficiency of the Labor Market Functioning in Ukraine

Abstract

The article outlines the key determinants influencing global and national labor market transformation, including globalization, digitalization, technological progress, demographic shifts, gender inequality, global migration, and global crises. The study aims to develop and implement a comprehensive scientific and methodological approach to assessing the efficiency of the Ukrainian labor market functioning in contemporary global challenges. To achieve this goal, the author proposes a methodology for calculating an integral indicator of labor market efficiency. The article applies system, structural-logical, and statistical analysis methods, the principal component method, indicator normalization techniques, and the method of integral evaluation based on the quadratic mean. The study uses eleven indicators reflecting employment levels, labor productivity, demographic trends, migration processes, gender disparities, and labor force quality. Empirical data on the Ukrainian labor market for 2010–2021 made it possible to analyze the dynamics of the integral indicator of labor market efficiency. The classification of efficiency levels was carried out using Sturges’ formula.

The study results indicate an unstable and cyclical nature of the domestic labor market development. It was found that the highest values of the integral indicator were recorded in 2012–2013, corresponding to a period of macroeconomic stability. Since 2014, labor market efficiency has declined, which is associated with the escalation of military conflict, political turbulence, and economic recession. The negative impact of the COVID-19 pandemic in 2020–2021 led to a further decline in the efficiency indicator. The average annual value of the integral labor market efficiency indicator during the study period was 0,615, corresponding to a medium range.

The conclusions substantiate the relevance of applying a comprehensive approach to diagnosing labor market efficiency, considering economic, social, and demographic factors. The proposed methodology enables an objective assessment of the current state of the labor market and supports scenario forecasting, strategic planning, and improving public employment policy. The results confirmed the importance of implementing adaptive regulatory mechanisms and enhancing the institutional potential of the labor market under global challenges.