Monetary Impacts on the Labor Market in Conditions of Uncertainty
Sidelnykova L. P.

Sidelnykova, Larysa P. (2024) “Monetary Impacts on the Labor Market in Conditions of Uncertainty.” The Problems of Economy 1:121–127.
https://doi.org/10.32983/2222-0712-2024-1-121-127

Section: Finance and banking

UDC 336.7:331.5

Abstract:
The aim of the article is to study the features of the impact of monetary policy on the domestic labor market during the wartime. The main trends in the labor market of Ukraine both before the full-scale invasion of the russian federation and under martial law are determined. The indicators of official statistics on the number of unemployed are studied, assumptions about the real level of this indicator are made, and short-term trends in the revival of registration of persons in the employment center as unemployed or job seekers are predicted. The impact of the bank rate policy pursued by the central bank on employment of the population has been proved. It is determined that the overall impact of changes in the bank rate in the country depends on the ratio between small and large enterprises, as well as on the share of employees with high and low levels of education. Reserve requirements for banking institutions are mentioned as a monetary instrument for influencing the labor market. It is emphasized that one of the main obstacles to doing business in wartime is the lack of working capital. It is calculated that in the structure of loans granted by the banks of Ukraine, the dominant value (more than 70%) belongs to economic entities. Considerable attention is paid to business lending (including within the framework of the state program «Affordable Loans at 5-7-9%») as a prerequisite for the creation of new jobs. The problems of growth in the volume of non-performing loans during the wartime are considered. The catastrophic position of Ukraine in the ranking of countries by the level of NPLs in the total volume of loans issued, compiled according to the World Bank data, is underlined. The trends in the level of NPLs in Ukraine before the full-scale invasion and the reasons for the growth in the volume of non-performing loans in 2022–2023 are analyzed. It is proved that the high cost of credit resources limits the availability of working capital in business and forces it to optimize wage costs, which leads to a decrease in the level of remuneration and reduction of jobs. It is substantiated that the monetary aspects of the influence on the preservation of the labor potential of the nation acquire special importance during the war.

Keywords: monetary policy, bank rate, reserve requirements, lending, labor market, unemployment, behavioral factors.

Fig.: 1. Tabl.: 3. Bibl.: 10.

Sidelnykova Larysa P. – Doctor of Sciences (Economics), Professor, Head of the Department, Department of Finance, Accounting and Taxation, Kherson National Technical University (11 Instytutska Str.., Khmelnytskyi, 29016, Ukraine)
Email: larisa1907s@gmail.com

List of references in article

“Kilkist zareiestrovanykh bezrobitnykh“ [Number of Registered Unemployed]. Ministerstvo finansiv Ukrainy. https://index.minfin.com.ua/ua/labour/unemploy/register/
“Riven bezrobittia v Ukraini“ [Unemployment Rate in Ukraine]. Ministerstvo finansiv Ukrainy. https://index.minfin.com.ua/ua/labour/unemploy/
“Infliatsiinyi zvit, kviten 2023 roku“ [Inflation Report, April 2023]. Natsionalnyi bank Ukrainy. https://bank.gov.ua/admin_uploads/article/IR_2023-Q2.pdf?v=7
Andolfatto, D., Hendry, S., and Moran, K. “Labour Markets, Liquidity, and Monetary Policy Regimes“. The Canadian Journal of Economics / Revue canadienne des Economique, vol. 37, no. 2 (2004): 392-420.
“Osnovni pokaznyky diialnosti bankiv“ [Main Performance Indicators of Banks]. Natsionalnyi bank Ukrainy. https://bank.gov.ua/ua/statistic/supervision-statist#1
“Non-performing loans - Country rankings“. The Global Economy. https://www.theglobaleconomy.com/rankings/nonperforming_loans/
“Ukraine: Non-performing“. The Global Economy. https://www.theglobaleconomy.com/Ukraine/Nonperforming_loans/
“Riven nepratsiuiuchykh kredytiv (NPL)“ [Level of Non-performing Loans (NPL)]. Natsionalnyi bank Ukrainy. https://bank.gov.ua/ua/stability/npl
Cheromukhina, O. K., and Chaliuk, Yu. O. “Rynok pratsi pid chas viiny: stan ta perspektyvy“ [The Labor Market During the War: State and Prospects]. Ekonomika ta suspilstvo. 2022. https://economyandsociety.in.ua/index.php/journal/article/view/2026
Jasova, M., Mendicino, C., and Supera, D. “Which workers are most affected by changes in the policy rate?“ The European Central Bank Blog. 2022. https://www.ecb.europa.eu/press/blog/date/2022/html/ecb.blog221019~f886f3680f.en.html