Labor Shortage in Russia: Short-Term and Long-Term Effects

This article examines a relatively new and non-standard phenomenon in the Russian labor market — shortage of labor, which may in principle retard overall economic growth. Assessing the extent and causes of this deficit is a task for independent scientific investigation. The article relies upon various sources of information, each of which shows a different trajectory for the increase in labor shortages. There are both long-term and short-term reasons for the expansion of job vacancies. Long-term causes include demographic factors which have been predetermined during previous decades and which manifest most significantly as a reduction in the potential working-age labor force. The short-term impacts of the epidemiological crisis of 2020-2021 and the economic sanctions that came into force after 2022 are still unfolding but are comparatively limited. The article examines the prospects and limitations of various methods for overcoming the labor shortage, such as raising the retirement age, providing incentives for immigration, increasing the economic activity of various age groups, lengthening work schedules, and industrial and sectoral restructuring of employment. The authors conclude that these measures will have only a partial and short-term impact. Any long-term and strategic solution depends upon increased labor productivity, which requires restructuring the economy, developing its high-tech sectors, and more investment in the economy, education, and human capital.

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