Higher education and the labour market in Ukraine: trends and challenges

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Borys Grinchenko Kyiv University, 13-b Tymoshenko Str., 04207 Kyiv, Ukraine

Higher education and the labour market in Ukraine: trends and challenges

Nataliia Mospan

Doctor of Sciences in Pedagogy

Associate Professor

Professor of Linguistics and Translation Department

Abstract

In 2020 international and national economies have reached a milestone in their development. A new decade started with the COVID-19 pandemic, which hit the world economy and affected higher education and the labour market interaction. A national model of higher education interaction with the labour market has been shaped under the influence of global trends and challenges of the past decades, e.g. globalisation, marketisation, internationalisation and Europeanisation. The COVID-19 pandemic caused new transformations and digitalisation. The present study explores Ukraine's higher education interaction with the labour market in the past decade. The research focuses on analysing the trends in higher education and the labour market in the pre-pandemic time. This interdisciplinary research integrates findings and perspectives from analytical reports, statistic data, and original surveys conducted in 2015 and 2020. The current state of play in the national higher education interaction with the labour market is described as an imbalanced model. It resulted in a supply and demand mismatch, a high unemployment rate of higher education graduates, educational and labour migration increase, and entrants' reduction due to the demographic and economic crisis. It is concluded that on the eve of the COVID-19 pandemic, Ukraine gradually lost modern factors of economic growth - human and intellectual capital. In turn, the Coronavirus crisis caused new challenges - remote working, an emergency transition of higher education to a digitally-based format and online distance learning. These trends will likely widen the gap between national higher education and the labour market.

Keywords: educational technology; distance learning; higher education; higher education graduates; labour market.

Вища освіта та ринок праці в Україні: тенденції та виклики

Мосьпан Наталія, доктор педагогічних наук, доцент, професор кафедри лінгвістики та перекладу, Київський університет імені Бориса Грінченка, вул. Тимошенка, 13-б, 04207 Київ, Україна

Анотація

higher education labor market

У 2020 році світова та національна економіки досягли віхи у своєму розвитку. Нове десятиліття розпочалося з пандемії COVID-19, яка суттєво вразила світову економіку та вплинула на взаємодію вищої освіти з ринком праці. Національна модель взаємодії вищої освіти з ринком праці сформувалася під впливом глобальних тенденцій і викликів останніх десятиліть, зокрема глобалізації, маркетизації, інтернаціоналізації та європеїзації. Пандемія COVID-19 спричинила нові трансформації та цифровізацію. У цій статті досліджується взаємодія вищої освіти з ринком праці в Україні за останнє десятиліття. Дослідження зосереджено на аналізі тенденцій вищої освіти та ринку праці напередодні пандемії. Це міждисциплінарне дослідження об'єднує висновки та перспективи аналітичних звітів, статистичних даних та оригінальних опитувань, проведених у 2015 та 2020 роках. Поточний стан взаємодії національної вищої освіти з ринком праці визначається як незбалансований. Це призвело до невідповідності попиту та пропозиції, високого рівня безробіття серед випускників закладів вищої освіти, збільшення освітньої та трудової міграції, скорочення абітурієнтів через демографічну та економічну кризу. Зроблено висновок, що напередодні пандемії COVID-19 Україна поступово втрачала сучасні фактори економічного зростання - людський та інтелектуальний капітал. Своєю чергою, коронавірусна криза спричинила нові виклики - дистанційну роботу, екстрений перехід вищої освіти на цифровий формат та дистанційне навчання онлайн. Ці тенденції, ймовірно, збільшать розрив між національною вищою освітою та ринком праці.

Ключові слова: випускники вищої освіти; вища освіта; дистанційне навчання; освітні технології; ринок праці.

Introduction

In 2020, a new decade started with the COVID-19 pandemic, which struck the world economy and affected higher education and the labour market interaction. This interaction has been shaped for two decades. The past decade brought globalisation, marketisation, internationalisation, Europeanisation, the Coronavirus outbreak, and the acceleration of digitalisation. These challenging processes have changed modern higher education nature and role, becoming powerful drivers for its modernisation and performance. In current European higher education development, the influence of market relations is growing, manifested in increased competition (national and international) for students, academic staff, and financial resources.

Higher education plays a vital role in managing the social, political, economic, and cultural infrastructure, where higher education is an increasingly mandatory requirement for employment. Marketisation requires higher education to provide high-quality educational services and train professionals according to the labour market demands.

In the market-based economy, ensuring balanced interaction between higher education and the labour market is the key to sustainable economic development. Emphasising the need to link higher education and the labour market, Bartlett W. et al. (2016) recommend that «priority should be given to raising awareness about the importance of employer cooperation with HEIs over curriculum design and recruitment» (p. 11). The EU Member States have created different regulation mechanisms for balancing higher education interaction with the labour market. Among them the establishment of a statistical agency in higher education; joint development of the N QF with employers and the government (de Weert, 2011, p. 48); ensuring the quality assurance in higher education in accordance with the labour market demands (ENQA, 2009, p. 16); state support for graduates during their transition from education to the labour market (EU Skills Panorama, 2014); official employment services for graduates; counselling centres for career guidance in HEIs (Bartlett et al., 2016, p. 39); the labour market forecasting; regular surveys of higher education graduates (European Commission, 2018, p. 70); monitoring the higher education graduate employment (de Weert, 2011); planning the number of vacancies for certain professions (teachers and doctors); legal regulation of professional employment (the licensing procedure, certification and registration for specific jobs (doctors, nurses, teachers, dentists) (Koumenta et al., 2014, p. 16); higher education professionalisation (Bonnard, 2020).

However, the transition from university to higher education graduates' employment remains a crucial issue for the EHEA (CEDEFOP, 2016). The recent evidence from Estonia (Kindsiko & Vadi, 2018), Slovakia (Gerbery & Miklosovicm, 2020), Serbia (Uvalic & Bartlett, 2020), Latvia (OECD, 2019), Spain (Riu et al., 2020) show the increase of higher education graduates unemployment rate and their difficulty in the first job-seeking. Despite higher education graduates with work experience gained during VET entering the labour market more smoothly, this positive «effect is no longer robustly significant for wages, unemployment or employment position after five years» (Oswald-Egg & Renold, 2021, p. 1). It is worth mentioning that the EHEA countries develop a skills strategy to link higher education and the labour market on the eve of the pandemic. These measures focus on reducing youth unemployment.

The EHEA's experience on this issue is valuable for Ukraine. Ukraine joined the EHEA in 2005. Since then, it has implemented national higher education reforms based on common vital values mentioned in the EHEA mission - «academic freedom, institutional autonomy, and students and staff participation in higher education governance» (Council of Europe, 2020). In pre-pandemic, Ukraine, on par with Spain, Italy, and Poland, has the largest student population in the EHEA. In the 2016/17 academic year, Ukraine had 1.5 m students in tertiary education (European Commission, 2020, p. 18).

Since signing the Bologna Declaration in 2005, Ukraine's higher education has undergone significant changes. The Bologna Process expansion and higher education marketisation have facilitated national higher education modernisation for the past decade. However, serious problems that characterise higher education performance in a market-based economy require immediate actions from the government. One of these problems is the lack of balanced interaction of higher education with the labour market and the regulation mechanisms. In this regard, the research focuses on revealing trends in higher education interaction with the labour market in pre-pandemic time in Ukraine. Furthermore, the paper describes a national model of higher education interaction with the labour market, shaped by global trends and challenges.

Research methods

This interdisciplinary research is conducted based on the literature review that «:can address research questions with a power that no single study has» (Snyder, 2019). The research integrates analytical reports, publications, statistic data, and empirical findings from surveys conducted in 2015 and 2020. Two surveys devoted to the related issues were conducted as independent examinations in 2015 (Mospan, 2016) and 2020 (Mospan & Slipchuk, 2020). Their data illustrate the findings. Besides that, a survey conducted at Borys Grinchenko Kyiv University in April - June 2020 reveals students' attitudes (n = 304) toward online education during the COVID-19 pandemic.

Research results

Higher Education and the Labour Market Interaction in 2010-2020. One of the indicators featuring the effectiveness of educational policy is the unemployment rate of higher education graduates. According to the State Employment Service, in 2010, among the unemployed aged 15-25, the share of graduates from HEIs was 36.9%, vocational schools - 55.9%, and secondary schools - 7.2%. In 2012-2013, the number of unemployed with higher education exceeded 400,000. That was 27% of the total number of registered unemployed. That shows that higher education diploma does not guarantee employment but only gives certain advantages in the labour market.

The rapid increase in the unemployment rate was caused by a sufficient skill mismatch in the national labour market due to political, economic, and demographic crises and rising demand for technical occupations. Thus, in 2011 the labour market was increasingly replenished by professionals with higher education (70%), despite inadequate demand. In 2014, the national labour market experienced a significant skills mismatch. In particular, there was a surplus of professionals in business and economics (57%) and law (55%), while there was a shortage of engineers (44%), ICT professionals (12%), and builders (17%). However, the crisis did not affect teacher education graduates, as the teaching profession, the least depends on market transformations in society. In 2014-2015, the majority of graduates (70.58%) worked in a teaching profession matching their education (Mospan, 2016).

According to the State Statistics Service and the Pension Fund of Ukraine, since 2014, the economic activity of the population aged 15-70 has been gradually declining. In 2017, the employed population aged 15-70 was 16.1 m, and the number of unemployed was 1.6 m. The highest employment rates were observed in Kyiv (61.6%), Kharkiv (60.5%), Kyiv (58.3%) and Dnipropetrovsk (57.9%) regions. Demand for the labour force grew significantly, and the vacancies increased in the IT sector, design, sports, office work, insurance and law. However, vacancies in medicine and pharmaceuticals, publishing, printing, and accounting have decreased. Approximately an equal number of men and women were involved in the national labour market.

In 2017 the most active jobseekers were young people of 25. High job-seeking of young people has become a new trend in the national labour market development for the past decade. It became popular to employ young people and students in education. For instance, 79.16% of teacher education students surveyed in 2015 worked while studying at university (Mospan, 2016). Student employment facilitated reducing the unemployment rate among young people under 25 to 17.8% in 2017 from 23.1% in 2016. However, it remains almost twice higher the overall unemployment rate in Ukraine.

In recent years, demand for highly qualified workers with work experience (doctors, pharmacists, engineers, lawyers, teachers, economists, accountants and ICT professionals) has risen dramatically. Since 2017, the mismatch in priority occupations due to the shortage of highly qualified workers has been growing, and it is likely to worsen significantly in the coming years. Furthermore, the professional priorities of entrants confirm that - technical occupations were the least popular, but philology (85 000 applications), law (74 000 applications), business and management (74 000 and 59 000 applications) were the most popular. The longterm imperfections in higher education interaction with the labour market have affected both markets. It has caused a mismatch between professional qualification standards and employers' requirements, deteriorating the quality assurance in higher and vocational education and exacerbating the supply and demand imbalance in the national labour market. A 2017 survey conducted by the Federation of Employers of Ukraine found that the country will face a significant shortage of high and low-qualified workers in the next decade. The shortage of engineering and technical professionals, agronomists, agricultural engineers, technicians, mechanics, turners, industrial operators, machines, and electric gas welders will be the most tangible.

The pre-pandemic feature of the domestic labour market was a dependency of Ukraine's economy on the supply and demand of the neighbouring labour markets in the EU and Russia. The political focus of Ukraine on the EU integration in 2014 caused a change in the outflow direction of human resources (from Russia to the EU) that has widened the imbalance of higher education interaction with the national labour market. Thus, in 2013-2015, the foremost work destination of Ukrainian labour migrants was the EU (70.2% with Poland share - 20.5%) and Russia (29.8%), but in 2015-2017 - the EU (73.7% with Poland share - 38.9%), and Russia (26.3%) (Libanova, 2019). In 2017, Poland became the most popular destination for Ukrainian labour migrants (39%) (Lucke & Saha, 2019; Pienkowski, 2020).

Since 2015, external educational migration has grown considerably. Among all the EU Member States, Poland attracts the Ukrainian youths the most due to a reasonable education fee, the opportunity to obtain a European diploma and find a job in the EU. According to Perspektywy, a Polish educational foundation, 23,3 000 students from Ukraine studied at Polish universities in 2015. 90% of the surveyed university students wanted to migrate abroad, a third of them - to Poland. Among teacher education students surveyed in 2015, the majority of respondents chose Ukraine (72.22%) and the EU (20.83%) as future job destinations (Mospan, 2016). In the 2016-2017 academic year, 77,424 Ukrainian students studied abroad - 8.6% of all Ukrainian students. The top 5 countries were Poland (33370), Russia (11440), Germany (9638), Canada (3425), and Italy (2536). In 2017-2018, the number of national students studying abroad increased to 9%. Poland received sufficient financial benefits from Ukrainian students (55% of all international students) (Stadny, 2019; National Quality Assurance Agency, 2020). After graduation, 75% of the respondents (1055) stayed in Poland, and 20% - came back to Ukraine (Gracz et al., 2018). As a result, the national economy loses the skilled labour force, negatively affecting GDP and economic development. Thus, due to Ukraine's European integration vector, the EU was the most attractive labour market and study destination on the pandemic eve.

These data indicate severe problems at the state level and within educational and market institutions. The recent Ukrainian education collision is the education sector isolated from the economic needs. Another significant problem is the imbalance of higher education interaction with the labour market. On the one hand, that causes an occupation surplus in some economic sectors. On the other hand, a shortage of highly qualified academic staff makes it impossible to train professionals demanded in the national labour market. As a result, the higher education graduates' unemployment increases and their difficulty in the first job-seeking occur due to insufficient awareness of the students about the situation in the labour and education markets; lack of necessary skills; lack of career guidance work with entrants and students; falling prestige of working professions among young people; increasing the supply and demand mismatch at the labour market.

It is essential to highlight the dual role of higher education in a market-based economy. On the one hand, it produces highly qualified workers for the labour market. On the other hand, higher education might be responsible for employing a significant share of the economically active population. A harmonised higher education interaction with the labour market is an influential driver of higher education performance in a market-based economy that contributes to sustainable development. However, the unemployment rate increasing among higher education graduates indicates the imbalanced interaction between HEIs and the labour market actors (employers, employment centres, recruitment firms) when the higher education `production' does not meet the real economic needs.

Furthermore, the interaction between higher education and the national labour market occurs due to the absence of information about the key actors' needs. They work `blindly' when higher education does not receive sufficient information about the vacancies and the labour market does not have the opportunity to report them. Graduates and jobseekers can only get information about occupation supply and demand from the State Employment Service, the State Statistics Service of Ukraine and private online job search sites: Trud. gov.ua, Robota.ua, hh.ua, Jobs.ua. However, the State Employment Service has data on vacancies only based on registered respondents. Online job search sites primarily aim at the individual consumer, not mass graduates. Thus, these organisations operate independently of educational and market institutions and have different goals and data sources that do not facilitate cooperation between higher education and the labour market.

In addition, national HEIs do not monitor their graduates' employment, and the state has no regulatory mechanism for the transition period duration. Therefore, during the transition from higher education to the labour market, higher education graduates have to search for work and employment and need help and support.

Based on the above, the national higher education interaction with the labour market is described as an imbalanced model. It means one direct interaction when higher education `working blindly or pointless' issues highly-qualified graduates `in the middle of nowhere. During the transition period, graduates rely primarily on fortune - relatives' support or appropriate vacancies in the labour market. In turn, the national labour market faces an increasing number of over-qualified workers, and it becomes unable to employ them due to a huge supply and demand mismatch (see Figure 1).

Figure 1. Model of higher education interaction with the labour market

Developed by the author

Thus, since 2014 in Ukraine, the negative processes in higher education interaction with the labour market have gradually increased. They have led to the imbalanced interaction between higher education and the labour market on the pandemic eve. On the one hand, quality assurance in higher education does not meet the national labour market demands, causing a high unemployment rate among graduates. On the other hand, national HEIs face an applicant decrease due to the demographic crisis and the national students' exodus to the EU.

The COVID-19 pandemic impact 2020. The COVID-19 pandemic crisis caused many lay-offs worldwide. In the United States, for example, in the first six weeks of quarantine, 33 m Americans filed for unemployment benefits - it is about 20% of the US workforce (Cheung, 2020). According to Eurostat's latest releases related to the COVID-19 pandemic, the current unemployment rate in the EU is increasing slowly (from 7 to 7.8%). Coronavirus affects Spain and Greece, where the unemployment rate has almost doubled since May 2020. The top 5 countries where the unemployment rate has significantly increased are Spain (16.2%), Greece (16.1%), Cyprus (10.5%), Lithuania (10.4%), and Italy (9.8%) (Eurostat, 2020). In Ukraine, however, official statistics do not show a crisis of this level. Though, opinion polls are more pessimistic and closer to American figures.

In Ukraine, according to the Centre for Economic Strategy (2020) comparative analysis, only 2% of the workforce (368 000 Ukrainians) lost their jobs during the Coronavirus crisis peak, while according to opinion polls, this figure can reach 16% (2.8 m). Besides that, the rate of people sent on unpaid leave (`hidden unemployment') has been dramatically reduced. According to the survey, the `hidden unemployment rate at the coronary crisis peak was about 3.1 m (about 17% of the workforce). The hotel and restaurant businesses suffered the most (see Figure 2).

Figure 2. Changing the number of vacancies by sector in March-June 2020

Adopted from: Centre for Economic Strategy in Ukraine

The pandemic caused a significant rise in the number of unemployed - by almost a third since March 2020 (State Employment Centre in Ukraine, 2020). The peak reached 518000 (see Figure 3). It was not only businesses that stopped working or cut jobs. Hundreds of workers ha e returned from overseas work to their hometowns and registered at employment centres. The Coronavirus crisis has affected everyone's life, without exception. Both representatives of intellectual and manual labour became unemployed. By 1 September 2020, 467 000 people were registered as unemployed (Conclusions of the fourth joint meeting, 2020).

Figure 3. Number of unemployed in January-September 2020 (in thousands) Source: State Employment Centre in Ukraine

Besides the labour market, the lockdown significantly affected higher education, forcing HEIs to adapt to digital format. The issue of distance learning in the context of the pandemic remains more relevant than ever. Higher education in Ukraine was not ready to provide remote learning in March 2020. National educators felt a great shock during the first week of the lockdown. «The reality has shown that not all higher education institutions have been technically prepared» (Berezhna & Prokopenko, 2020, p. 133). HEIs faced technical and psychological challenges. Nevertheless, national HEIs managed to provide digitally-based education (including virtual classes) due to internal resources (e.g., Moodle) and external EdTech recommended by UNESCO (UNESCO, 2019). Among the pioneers in providing digitally-based education during the COVID-19 pandemic for March - July 2020 were national universities in the capital or regional cities.

Based on the evidence of national teacher students and international medical students (Mospan & Slipchuk, 2020), it is worth mentioning that a distance-learning format (including blended and virtual learning) was a new experience for the majority of national (79.2%) and international (79.5%) students in spring 2020. However, the majority of national and international students positively perceived remote online learning and found this mode interesting (55.6%/46.2%) but tiring (50.7%/38.5%). Moreover, EdTech emergency integration is diverse and depends on the university's facilities and the field of educational services. Therefore, EdTech implementation differs in humanitarian and medical universities. Thus, among frequently used LMS is Moodle (94.4%) in humanitarian universities and Neuron (90%) in medical universities. Google Classroom is typical for both university types (32.5%/45%). Virtual classes were provided on Zoom (76.1%/91.7%) and less on Google Meet (55%/20.8%). However, Skype (25.2%/16.7%) was the least used platform for live- video communication. In addition, WebEx (61.8%) was applied in humanitarian universities (see Table 1).

Table 1. Students' evidence of remote online learning in spring 2020 (%)

Developed by the author

Consequently, providing digitally-based education may cause new challenges in higher education and the labour market. On the one hand, it requires reskilling academic staff, primarily ageing teachers and students. On the other hand, the transition to digital format forces HEIs to find extra money for financing EdTech access.

Furthermore, the COVID-19 pandemic has deepened the imbalance between higher education and the labour market in Ukraine. Digitalisation has launched a new transformation of higher education and the labour market, bringing online remote learning and work. In this regard, the article highlights recent trends in national policy on education and economics. One of the current educational trends relates to the statistic monitoring of employment. As mentioned above, there are no accurate statistics on higher education graduate employment in Ukraine. The Ministry of Education and Science (MES) collects the information from HEIs. To this end, in June 2019, the MES, together with the Pension Fund, announced establishing a monitoring system for tracking higher and vocational education graduate employment. That is an identification codebased system that allows monitoring of students' careers. The MES believes that the monitoring system will track further graduate career growth. Besides that, it allows analysing the quality assurance in higher education for making corrections in national educational policy.

Another recent educational trend relates to funding transformation and reduction of national HEIs number. These measures are due to the universities (about 300) and students' number mismatch, whose number has been declining sharply for the past decade. In addition, the vast university network pressures the state budget due to the enrolment-based funding allocation model. Therefore, in August 2020, the MES approved performance-based mechanisms for allocating university funds. The significant criteria for financing a university are the rank of higher education graduate employment. In this way the government actions aimed at funding optimisation and university number reduction.

Conclusions

The past decade's global economic and political processes have resulted in recent national higher education interaction with the labour market trends. The economic trends include supply and demand mismatch, tertiary student employment, a high unemployment rate of higher education graduates, unemployment and labour migration increasing, and remote working in the national labour market. The educational trends relate to entrants' reduction due to the demographic and economic crisis, a high rate of external educational migration, and the emergency transition of higher education to digitally-based format and online distance learning. The pre-pandemic state of play in the national higher education interaction with the labour market was imbalanced. As a result, Ukraine was gradually losing modern factors of economic growth - human and intellectual capital, on the pandemic eve. The COVID-19 pandemic may widen the gap between higher education and the labour market. Regarding this, the research prospect is to investigate the interaction of higher education and the labour market during the pandemic crisis.

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