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International Journal of Management (IJM) Volume 11, Issue 6, June 2020, pp. 1907-1921, Article ID: IJM_11_06_174

Available online at http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=11&IType=6

ISSN Print: 0976-6502 and ISSN Online: 0976-6510

DOI: 10.34218/IJM.11.6.2020.174

© IAEME Publication Scopus Indexed

THE IMPACT OF MIGRATION PROCESSES ON

THE DEVELOPMENT OF HUMAN CAPITAL IN

THE REGION

Larysa Fedoryshyna

Department of Researches of Customs Risks,

Scientific and Research Center of Customs Affair of Research Institute of Fiscal Policy of

University of State Fiscal Service of Ukraine, Khmelnytskyi, Ukraine

Igor Piliaiev

Department of International Relations and Organization of Tourism,

Interregional Academy of Personnel Management, Kyiv, Ukraine

Marina Malanchuk

Defense Management Center, National University of Defense of Ukraine

named after Ivan Chernyakhovsky, Kyiv, Ukraine

Olga Moshak

Department of Economics and Entrepreneurship,

Uzhgorod National University, Uzhgorod, Ukraine

Yuliia Lepekh

Department of Law, Interregional Academy of Personnel Management,

Lviv, Ukraine

ABSTRACT

The article considers the main aspects of the impact of migration processes on the

development of human capital in the region. It is established that migration processes

significantly affect the quality of life of the population, the economic situation in the

regions and the development of human capital. The analysis shows that the assessment

of human capital and its dynamics must be carried out taking into account the

demographic structure. The transformation of human capital in the region is assessed

through the prism of the distribution of demographic elements by age groups. The

dynamics of human capital must take into account the demographic structure as a

system that includes three components: education, health and culture. Targeted

investments in human capital of the region are a prerequisite for socio-economic

development of the region. To analyze the impact of human capital on the region's

revenues, we use the Cobb-Douglas production function. This study proposes to

calculate the return on the level of education (qualification) of migrant workers and

The Impact of Migration Processes on the Development of Human Capital in the Region


fixed assets using the indicator of labor capital and the level of education of one

employee. The developed tools will be used to take into account the heterogeneity of

work of different regions, using the indicator "income of the population of the

regions", which takes into account both the number of employed population and the

level of qualification of this population. It is proved that the studied processes:

regional development and regional human development are interconnected and

interdependent. It is proposed to modernize the state policy on socio-economic

development of the regions, to keep statistical records on migration processes in order

to prevent the development of depressive processes in the regions.

Key words: migration processes, human capital, migration flows, regional policy,

human capital development

Cite this Article: Larysa Fedoryshyna, Igor Piliaiev, Marina Malanchuk,

Olga Moshak and Yuliia Lepekh, The Impact of Migration Processes on the

Development of Human Capital in the Region, International Journal of Management,

11(6), 2020, pp. 1907-1921.

http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=11&IType=6

1. INTRODUCTION

1.1. Relevance of the Topic and Problem Statement

Migration processes are largely related to global economic, social, political and technological

transformations that are taking place in the modern world economy under the influence of the

latest transformational changes.

There are significant changes in labor markets. The requirements for the acquisition of the

following basic competencies increase: developed cognitive skills (complex problem solving),

social and behavioral skills (teamwork) and a combination of skills that determine the ability

to adapt (logical thinking and self-confidence, etc.). Such skills require a solid foundation in

the form of human capital and lifelong learning. Access to information, goods and services

from around the world, the expansion of technology and the reduction of distances, affect the

rational choice of people, including in the choice of residence and job search. Migration and

displacement have a significant impact in the long-term social spheres, security, political and

economic contexts. Migration products disclosed with expansion and external redistribution,

using which the composition and structure of human capital. (Sudomyr et al.,2020). That is,

the fundamental question on the agenda is about future problems with the redistribution of

brains, with the identification of potential opportunities for regions that are participants in

migration processes. Such questions concern the definition of the range of future migrants -

who will migrate, for what reasons and what are the short- and long-term results of these

processes in relation tohuman capital development of the regions. The issues of growth /

outflow of human capital of regions, losses / benefits of regions from such processes of

human capital flow are actualized. In addition, important issues are the integration of

migration flows, the adaptability of human migration capital to the historical human capital of

the region. The issues of individual experience of migrants, multidirectional flows with the

participation of migrants, changes in the regulatory regimes of the world and their time

conditions are brought up. After all, human capital is a complex combined phenomenon. And

the redistribution of human capital as a result of migration is a complex, poorly regulated

process that has a high level of uncertainty and is difficult to predict in terms of probabilistic

consequences. Understanding the dynamics of human capital as a component of the socio-

economic sphere of the region is important in terms of impact on other forms of capital and

the development potential of the territory. Thus, the development of human capital (with its

Larysa Fedoryshyna, Igor Piliaiev, Marina Malanchuk, Olga Moshak and Yuliia Lepekh


emphasis on success in the labor market) is associated with the formation of cultural capital

(with an emphasis on education and language) (Bourdieu, 1984). Human capital is a

component of migratory capital (Brickell & Datta, 2011), in which its elements are enhanced

or limited due to the nature of the migration experience. Studying migration, scientists

conclude about the complex structure of human capital. In the literature on career and study

(Salt, 1988), the concepts of brain drain, brain exchange, brain training, etc. are used. That is,

the redistribution of human capital as a result of migration processes will be associated with

the intellectualization of territories, the formation of the intellectual potential of the region.

In such conditions, the institutional aspects of regulating migration processes become

especially important. Targeted regional programs, highlighting the key aspects of creating

conditions for the balanced development of human capital in the region - an important area of

public administration aimed at developing socio-economic systems of the regions.

Thus, the study of the ability to work, skills and abilities of human capital in the context

of migration, should be considered in conjunction with other forms of capital: social, cultural,

intellectual, financial (Bakulina et al., 2019; Martunyuk et al., 2019; Korepanov et al., 2020;

Tkach et al., 2019).

The purpose of this article is to identify key vectorsthe impact of migration processes on

the development of human capital in the region and the search for opportunities and tools to

manage such processes.

In the framework of this study, the following problematic issues are identified:

regulation of migration processes;

methods for assessing the processes of transformation of human capital in the region

under the influence of migration processes;

management tools for various components of human capital in the region.

2. THEORETICAL SECTION

2.1. The Essence of the Impact of Migration Processes on the Development of

Human Capital in the Region

Population migration is a socio-demographic process that affects the development of

economic systems of regions and transformational changes in human capital.

Migration flows affect related regions, moving from regions with less developed

economic systems and infrastructure to more prosperous regions. Interstate and interregional

migration is the forced or voluntary movement of people across state and regional borders.

Labor migration acquires a special role, influencing the development of the regions involved

in migration processes.

One of the main incentives for migration is the presence or absence of high-paying jobs

and employment opportunities on terms that are satisfactory for the individual. One of the

strongest motivating factors that motivates a person to make a migration decision is the

difficulty of finding a job in the region of residence. An important factor in the attraction to

migration is the high income of the working population in the host region. Another important

factor in choosing a migration region for young people is the possibility of receiving a good

education and then a well-paid job. The decision to migrate is influenced by the level of

public goods in the host region (preschool, primary school, health care, low crime and

infrastructure development). Migration affects the quality of life of people, partially smooths

out existing interregional differences. Migration processes significantly affect the quality of

life of the population, the economic situation in the regions and the development of human

capital in the region. In determining the human capital used in the literature, the main



emphasis is on the economic return on investment in human capital. In a study, Schultz

(1960) defines human capital as "acquired skills and knowledge." The World Bank (2006)

defines human potential as the productive ability of people to contribute to economic

production. In terms of science and informatization, the role of human capital as a basis for

competitiveness at both micro and macro levels is growing. Of particular importance are

investments in human capital, which create other non-economic benefits: improving health,

improving personal well-being, strengthening social cohesion.

Migration processes have a significant impact on human capital. Countries and regions

differ not only in economic indicators, but also in the quality of human capital generated by a

particular territory. This is expressed in the level of training, education, acquired skills, health

status, motivation for self-development and so on. Therefore, human capital accumulated in

the country of origin cannot be fully transferred to the host country. Differences in the level of

education, professional skills, in relation to local workers, immigrants from economically

developed countries are much higher than immigrants from third countries. Therefore, wage

levels for immigrants and the local population differ accordingly. At what, this is more for the

labor market for middle-skilled workers and has nothing to do with the labor market for

highly skilled workers. Studies show that the level of education significantly affects a person's

ability to assimilate into a new environment. Most labor market surveys show a lack of

equality for migrants in host countries with local workers in terms of pay and employment

opportunities. As for the EU labor market, success is not guaranteed even for highly qualified

immigrants. Although in countries with more favorable immigration policies, the difference in

wage levels between immigrants and local workers is smaller. The situation is more favorable

for workers with medium qualifications than for highly qualified employees the level of

education significantly affects a person's ability to assimilate into a new environment.

(Vicente Royuela, 2013b). The quality of human capital is one of the key factors that

determines the high level and is the driver of socio-economic development of the country and

regions. The UN Development Program determines the human development index by the

following criteria: long and healthy life; level of knowledge and access to education and

knowledge; decent standard of living. The basis of human development is opportunity. The

UN Report uses this term and examines inequality of opportunity. Human development

depends on the capabilities of different countries (regions). When migrating, the possibilities

of a particular region are relativelyhuman developmentplay a crucial role. Opportunities are

not a constant characteristic of the territory, they change, depending on the circumstances,

values, as well as the needs and aspirations of people. Today, a number of basic opportunities,

which are associated with the absence of extreme financial difficulties, are no longer enough.

Enhanced capabilities are becoming extremely important for the modernization and further

development of human capital. Some human capabilities develop over a lifetime, enhanced

capabilities are achieved at the appropriate stages of human life (Figure 1).

Figure 1 Basic and advanced opportunities for human development



The movement of human capital to more prosperous regions, of course, has an impact on

its further development, but does not solve the problem of inequality in human development.

Moreover, in recent years we have a growingthe gap in advanced capabilities, despite the

reduction of the gap in basic capabilities. The projected life expectancy at birth, the

percentage of the population with primary education and the number of mobile cellular

subscribers - all this indicates a reduction in inequality in groups of countries with different

levels of development (Figure 2).

Figure 2 Basic and expanded opportunities for human capital in different countries in the field of

health, education, access to technology (Human Development Report Office, 2019)



People from less developed countries progress faster than people from more developed

nations. Life expectancy at birth in countries with low levels of human development was

almost three times higher than in countries with high levels of human development. In recent

years, there has been a decline in infant mortality in developing countries. Opportunities for

human capital development are higher the higher the level of economic growth of the country

/ region to which migration flows are directed. A region with a high level of economic

development is able to create opportunities by increasing funding for areas such as education,

health, culture and infrastructure. Thus, the creation of material, intellectual and spiritual

opportunities for the development of human capital becomes an important task of the state.

Human capital has its stages of development (Figure 3).

Figure 3 The impact of migration processes on indicators by stages of human capital development

The formation and development of human capital is a long process that is organizational

and complex. The condition for qualitative growth and development of human capital is the

state policy in the field of education, culture, health care and professional training of young

professionals. Targeted policy to improve the quality of labor resources contributes to the

economic growth of the country / region, increases migration flows to such regions, which, in

turn, leads to qualitative renewal and further development of human capital. Human capital is

an element of the socio-economic system. The human capital model is presented in Figure 4.

Human capital

Formation Development and accumulation Using

Migration processes

Demographics Indicators of the

education system

Indicators of

economic activity

of the population

Indicators of

social activity of

the population

Stages of human capital development

Indicators of human capital development



Figure 4 The model of human capital as a component of the socio-economic system of the region

To understand the impact of migration on human capital in the region, it is proposed to

identify the carrier of human capital demographic element - an individual who is currently

characterized by age . The assessment of human capital and its dynamics must be carried out

taking into account the demographic structure. The transformation of human capital in the

region is assessed through the prism of the distribution of demographic elements by age

groups. The following approaches are used:

using balance matrix equations of movement of age groups, where age and time

(year) are considered as discrete variables;

using continuous models of demographic dynamics.

The model of distribution of demographic elements by age groups is formed through the

equation of dynamics of age structure (Cederstroem, 1990; Quinn MA. (2009):

(1)

where - the density of the population distribution by age over time ;

- coefficient of distribution of mortality by age, which determines the proportion of

deaths in each age group per year ;

- coefficient of distribution of population migration related to change of citizenship

by age, which determines the share of migrants in each age group per year .

Initial and boundary conditions:

( ,τ)= ;

∫

;

Human capital

Natural and

biological

properties

The set of essential

elements of the human

capital system

Acquired

quality

Physical capital Intellectual capital Organizational

capital

Information capital Structural capital

Production capital Economic capital Social capital

Human capital is an element of the socio-economic system of the region



where - the density of population distribution at the initial time ;

- the coefficient of distribution of births by age, which determines the share of

births in each age group per year .

The migration distribution coefficient is determined by the formula:

(2)

where - migration increase (decline) in the year per ages .

The general error of modeling the demographic dynamics of human capital in the region

depends on the quality of input statistics and errors in their approximation.

Based on the model of demographic dynamics, it is possible to calculate derivative

demographic characteristics, such as the total population of the region, the working age

population, the volume of economically active population, load factors, and so on. Total

population:

∫

(3)

The volume of economically active population is determined by the formula:

∫

∫

(4)

where - the density of distribution by age groups of the male population;

- density of distribution by age groups of the female population;

and - the share of men and women of age who participate in economic

activities per year .

The specific average value of human capital in each age group per year is determined

by the formula:

= (5)

𝛜 (0,1), ∑

where - significant coefficient; index = 1 corresponds to the educational component, = 2 - component of health, = 3 - cultural / spiritual component of human capital.

The change in the components of human capital is described by the equation of the

form:

(6)

Here, , - specific investments of the budget and specific

private investments in –th component of human capital;

- depreciation ratio (disposal) - th component of human capital. Where =

initial conditions have the form:

( ,τ) = .

To build the distribution curves by age groups of the specific components of the cost of

human capital development and aimed at increasing human capital, it is

necessary to determine the population in each age group at any time, which uses the solution

of demographic dynamics. Amounts invested by the budget on articles ( -

ordered numbering of budget articles spent on education ( = 1,) health care ( = 2) and

development of cultural / spiritual component of human capital ( = 3)) will be distributed

evenly over the relevant characteristic periods of life persons [

] associated with the

relevant items of expenditure (preschool education and education (preschool period of life),



school education (school period of life), etc., and the number of demographic elements in

these periods.

Thus, migration processes have an impact on the human capital of the region. The

dynamics of human capital must take into account the demographic structure as a system that

includes three components: education, health and culture. Targeted investments in human

capital of the region are a prerequisite for socio-economic development of the region.

3. METHODOLOGY

The methodological basis of this article are general and special research methods, concepts,

approaches: the theory of human capital, economic theory, migration theory. The study was

conducted according to the general scientific principles of the systems approach. To

implement the tasks in the study used methods: dialectical knowledge of economic processes

(to substantiate the essence of migration, human capital); generalizations (to reveal the

composition and structure of human capital); approximation, regression analysis and

extrapolation (to assess the impact of migration processes on the level of socio-economic

development of the region); rating (to determine the disposition of labor migration regions);

statistical analysis (to assess trends in migration flows). The study was conducted on the basis

of statistical information of Ukraine.

4. ANALYSIS OF RESULTS

4.1. Research of Modern Migration Processes of Ukraine

The study of migration flows of the population of Ukraine was conducted on the basis of

official statistical information. Characteristics of incoming and outgoing migration flows of

Ukraine are presented in Figure 5a and 5b.

Figure 5a. Characteristics of incoming migration flows of Ukraine, persons

Figure 5b. Characteristics of initial migration flows of Ukraine, persons



According to the data, interstate migration in Ukraine by incoming flows is 7.8% in 2019,

by outgoing - 4.8% of the total. The bulk of migration flows is interregional movement within

the country (Figure 6).

Figure 6 Interregional migration movement of the population of Ukraine in 2019, persons

The highest migration growth is characteristic of Kyiv, Odesa, Kharkiv oblasts and the

city of Kyiv. That is, these regions, where migration flows are the most attractive, have the

greatest attractive effect.

Table 1 presents data on internal interregional migration processes in relation to the

population in the world.

Table 1 Coefficients of migration in the world (interregional migration),% of population

Country

Proportion of

interregional

migrants

Population

(thousands of

people)

Area (km2)

The average distance

between the regions,

km

USA 2.3 5 784 179 646 2 275

EU (27) 0.4 2 627 24 281 1 970

Japan 2.1 2 717 8 040 451

Canada 2.9 2 575 699 500 3 225

China 3.0 40 103 284 070 1 470

Russia 0.6 1 826 218 961 3 626

Ukraine 4,8 1740 25151 715

It is clear that the mobility of the population in Ukraine is one of the highest. At the same

time, the average population living in different regions is lower than in the United States or

Canada, which can be compared by area. Thus, speaking of the high mobility of the

population of Ukraine, it is necessary to keep in mind the large scale of territories and the

uneven distribution of the population.

Figure 7a shows migration flows in urban areas, and Figure 7b - rural areas of Ukraine.



Figure 7a. Migration flows in urban areas of Ukraine (2002-2019), persons

Figure 7b. Migration flows in rural areas of Ukraine (2002-2019), persons

Migrants, almost equally, come from cities and villages.Migrants are the most active

representatives of rural settlements and depressed regions.As less than a third of Ukrainians

live in rural areas, migration is twice as common there as in urban areas.According to the

figures, the most active is the movement of population within the country. This indicates a

low level of psychological readiness of the population of Ukraine for international migration.

In addition, the low level of financial readiness to find a new place of residence forces people

to search for better conditions within the country. Since 2017, the process of labor migration

has intensified significantly, with a tendency to increase such activity (2.7 million people per

year). In Ukraine, the number of newcomers to permanent residence exceeded the number of

those who left the country. The positive balance of migration in Ukraine is created by

migration flows with the CIS countries, as well as the excess of the number of arrivals from

other foreign countries over the number of those who left.

In internal migration processes in Ukraine are spontaneous and not regulated at the

regional level. Basically, this is the goal of employment in more prosperous regions, such as

the capital.

According to the statistics of socio-economic development of Ukraine, unregulated

migration deepens the country's regional disparities. Regarding international migration flows,

the socio-economic situation in Ukraine is not attractive for migration. Inbound foreign

migration flows are formed, mainly due to the education of foreign students and the return of

Ukrainian workers home. The disadvantage of public administration islack of mechanisms in

Ukraine for the return of foreign Ukrainians. Also, unfortunately, there is no system for



attracting highly qualified specialists from abroad, but, on the contrary, the low level of

salaries is the reason for the outflow of highly qualified personnel from the country.

Such trends are characterized by negative consequences for development of human capital

in the regions of the country. Regarding international migration, the trend of recent years is a

change in the vector regarding the countries of employment of Ukrainian labor migrants.

Thus, migration to Russia has decreased by at least a third, and the number of migrants to

Poland has tripled to 0.5 million. Given the large number of Ukrainian migrants in Italy and

the Czech Republic, the European Union is the largest region for employment of migrants

from Ukraine. Since 2017, about 75% of Ukrainian migrant workers have worked in EU

countries. According to statistics, 200,000 Ukrainian labor migrants arrived in Poland in

2017-2018. In 2019, labor migration from Ukraine slowed down. According to the data, the

highest level of migration activity is typical for the western regions of Ukraine, where the

level of GRP is much lower (16% of Ukraine's GDP). About 70% of labor migrants are from

the western regions of Ukraine, although about 25% of the country's population lives there.

70% of labor migrants are men. The exception is Italy, where 73% of migrant workers are

women, who most often provide care services in Italian families. Migrants in Russia and

Poland are characterized mainly by manual labor in agriculture, construction and industry.

About 40% of migrant workers are under the age of 35 (in Poland - 47%).

People with higher education are less likely to migrate, with people with vocational

education predominating among migrant workers. The share of migrants with higher

education (33%) is lower than among the working age population (45%). On the contrary,

people with vocational training make up 34% of migrants (46% in Poland), which is only

24% of the working age population. More than half of migrants in the EU are employed in

work that requires basic training. 46% of migrants in Poland, 56% in Italy and only 21% in

Russia said they were too skilled to do the job. According to statistics, 26.8% of migrant

workers worked abroad in their specialty and qualification, 36% - in jobs that did not require

qualifications, about 30% were retrained.

Thus, as statistics have shown, migration processes mainly affect people of working age

of the middle level of qualification. Highly qualified professionals are much less likely to

migrate.

However, if the level of income in the region of residence does not meet the expectations

of highly qualified professionals, they choose a country where the level of quality of life will

meet the demands. Most often, such migrants move with the whole family and assimilate to

the new environment in a new place. The loss of highly qualified specialists, people of

working age, is a significant loss for the region of departure of migrants, and the acquisition -

for the region of arrival of such people, significantly affecting the quality of human capital of

the regions. Even if migrant workers are in another region / country just to find work - it is

show about negative energy for the development of people’s capital.

4.2. The Nature of the Mutual Influence of Human Capital and Migration

Processes

To analyze the impact of human capital on the region's revenues, it is advisable to use the

Cobb-Douglas production function. Regression coefficients are calculated using official

statistics by region. These coefficients characterize the elasticity of "output" on the factors of

production used in the Cobb-Douglas function (fixed assets of regions, the number of people

employed in the economy of regions, including migrants, and the average level of education

of the employed population). As a basic model, consider the extended Cobb-Douglas

production function:



(7)

where - a variable that reflects the total income of the population -th region;

- the amount of fixed assets of the -th region;

- the number of people employed in the economy of the -th region, including labor

migrants;

- the average level of education of the population employed in the economy of the -th

region, including migrant workers who are employed in the field of medium and high-skilled

labor.

The corresponding regression equation is as follows:

(8)

The return on the level of education (qualification) of migrant workers and fixed assets

should be calculated using the indicator of labor capital and the level of education of one

employee. To take into account the heterogeneity of work in different regions, it is advisable

to use the indicator "income of the population of the regions", which takes into account both

the number of employed population and the level of qualification of this population. In 2018,

Ukraine has a human development index of 0.750, which means 88 positions out of 189

countries and territories. During the period from 1990 to 2018, the value of the indicator in

Ukraine increased from 0.705 to 0.750, ie by 6.3%. Ukraine's progress in each indicator of the

human development index is presented in Figure 8.

Figure 8 Dynamics of the components of the human development index of Ukraine for 1990-2018

During the period from 1990 to 2018, life expectancy at birth in Ukraine increased by 2.1

years, the average number of years of study increased by 2.2 years, and life expectancy

increased by 2.7 years. At the same time, the gross national income per capita of Ukraine

decreased by approximately 25.6%.

Table 2 presents the level of human development in some regions of the country.

Table 2 Integrated assessment of regional human development in Ukraine

Regions 2004 2010 2013 2015 2017

Dnepropetrovsk 3,4776 3,6140 3,7213 3,7816 3,7686

Transcarpathian 3,7834 3,8340 3,9817 4,0275 4,0233

Kyiv 3,5052 3,8014 3,8710 3,8592 3,7541

Odessa 3,3546 3,7470 3,8188 3,7879 3,7100

Kharkiv 3,4865 3,8512 4,2097 4,1996 4,0564

Chernivtsi 3,5332 3,8510 4,1621 4,1321 4,2294

Chernihiv 3,1473 3,5215 3,6884 3,6709 3,7247



According to the above data, the indicator of regional human development in the regions

that, according to previous studies, are the most attractive for migration, has a positive

dynamics. Thus, these processes: the development of the region and the indicator of regional

human development are interrelated and interdependent.

Therefore, to prevent the development of depressive processes in the regions, it is very

important to pursue a balanced state policy, implement programs of socio-economic

development of the regions, to keep statistical records on migration processes.

5. CONCLUSION

In this studythe main aspects of the impact of migration processes on the development of

human capital in the region are considered. It is established that migration processes

significantly affect the quality of life of the population, the economic situation in the regions

and the development of human capital in the region. Countries and regions differ not only in

economic indicators, but also in the quality of human capital generated by a particular

territory. This is expressed in the level of training, education, acquired skills, health status,

motivation for self-development and so on. The analysis shows that the assessment of human

capital and its dynamics must be carried out taking into account the demographic structure.

The transformation of human capital in the region is assessed through the prism of the

distribution of demographic elements by age groups. The dynamics of human capital must

take into account the demographic structure as a system, which includes three components:

education, health and culture. Targeted investments in human capital of the region are a

prerequisite for socio-economic development of the region. The study of migration flows of

the population of Ukraine was conducted on the basis of official statistical information.

According to the data, interstate migration in Ukraine by incoming flows is 7.8% in 2019, by

outgoing - 4.8% of the total.

The bulk of migration flows is interregional movement within the country. To analyze the

impact of human capital on the region's revenues, we use the Cobb-Douglas production

function. This study proposes to calculate the return on the level of education (qualification)

of migrant workers and fixed assets using the indicator of labor capital and the level of

education of one employee. The developed tools will be used to take into account the

heterogeneity of work of different regions, using the indicator "income of the population of

the regions", which takes into account both the number of employed population and the level

of qualification of this population. It is proved that the studied processes: regional

development and regional human development are interconnected and interdependent.

It is proposed to modernize the state policy on socio-economic development of the

regions, to keep statistical records on migration processes to prevent the development of

depressive processes in the regions..

The direction of further research is to develop a methodology for designing the

intellectualization of regional development in a knowledge economy.

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