Geopolitical Conflict and Labor Market Transformation
The research group studies how wars and geopolitical tensions transform labor markets. Wars disrupt labor markets by causing population loss and displacement, as well as physical destruction and the interruption of value chains. Even in the absence of open warfare, geopolitical rivalry and political fragmentation are increasingly reshaping labor markets. Heightened economic uncertainty makes security and resilience central to economic policy, prompting governments to promote strategic industries and strengthen defense capabilities. Consequently, geopolitical conflicts affect both labor supply and labor demand, and drive the reallocation of labor across firms, sectors, and regions. The research group examines these transformations with a particular focus on individual labor market trajectories and regional disparities within countries.
The first research focus examines how warfare shapes individual labor market trajectories. Particular attention is given to war-affected populations, including veterans, war widows, and displaced people, as well as to the role of welfare institutions in shaping their long-term labor market outcomes and supporting labor market reintegration after armed conflict. Since many war victims are of working age and often have young children, their labor market integration is essential for post-conflict reconstruction. Our research adopts a life-cycle perspective, analyzing labor market outcomes from human capital formation in adolescence to employment patterns in midlife and retirement behavior in old age.
The second research focus concerns regional labor market transformation. Geopolitical conflicts affect regions unevenly, setting them on divergent development paths and potentially contributing to persistent regional disparities. The research group studies how industrial policy, structural change, displacement, and conflict-induced technological change affect the economic performance of regional labor markets. Particular attention is given to policies that improve regional resilience to adverse labor market shocks.
The research group adopts a long-term perspective, drawing on both historical and contemporary evidence. This perspective is essential because geopolitical conflicts often have long-term labor market consequences that evolve over time and over the life cycle.
