THE FINANCIAL COMPONENT OF HUMAN CAPITAL DEVELOPMENT IN UKRAINE UNDER SOCIAL AND ECONOMIC TRANSFORMATIONS

Abstract

Introduction. In the context of full-scale war, socio-economic transformations, and Ukraine's European integration aspirations, ensuring the sustainable development of human capital has become a strategic challenge. The traditional model of financial support, focused on current consumption and passive transfers, proves to be insufficiently effective for the reproduction of human potential under conditions of critical resource deficits and infrastructure destruction. Purpose. The purpose of the article is a comprehensive analysis of the current state of financial instruments for human capital support in Ukraine (education, healthcare, social protection) and the substantiation of priority directions for their modernization under martial law and post-war recovery. Methods. The study is based on systemic and structural-functional analysis, economic and statistical methods, and predictive modeling based on the RDNA5 report data. The authors analyzed the dynamics of budget expenditures on the social sphere for the period 2014–2025, which allowed for identifying patterns in the transformation of state financial policy. Results. The study identified key imbalances in the current model, in particular, the predominance of current expenditures over investment ones and the effect of "fiscal displacement" of social expenditures by defense needs. It was established that the share of education expenditures in total budget spending decreased from 15–17% in the pre-crisis period to a minimum of 6.57% in 2025. Similar trends are characteristic of healthcare and social protection, where an exhaustion of internal resources to maintain social standards is observed. It is proved that the transition to result-oriented budgeting and active employment programs can significantly increase the efficiency of public funds utilization. Conclusion. The study confirms that the implementation of investment-oriented financial instruments is a necessary condition for preserving human capital as the main factor in Ukraine's recovery. Practical recommendations include expanding "money follows the result" mechanisms, strengthening the targeting of social support, and integrating international financial assistance into the national system of strategic planning.