Every Third Kazakhstani Works Informally or Hides Their Income
Approximately one-third of working Kazakhstanis are employed informally, lacking social guarantees, labor protections, and pensions. This is according to the research “Features of Labor Market and Employment in Kazakhstan” by Adam Research. The findings, analyzed by the Energyprom agency, shed light on the scope of informal employment in the country. The survey revealed that 36.4% of respondents acknowledged working in the shadow economy. This figure is higher among men (37.6%) than women (34.9%). Informal employment is categorized into three main types: Work without a labor contract: 16.6% Shadow entrepreneurship: 13.6% Part-time work without registration: 6.2% Young people and retirees are disproportionately represented in these informal sectors. The study, conducted via telephone survey of adults in all 17 regions of Kazakhstan, found that southern areas like the Turkestan and Almaty regions, along with Shymkent, had the highest rates of informal employment. Conversely, East Kazakhstan and Ulytau regions recorded the lowest rates. Informal workers are often individuals with secondary education working outside their specialty. Their earnings vary widely: Those without labor contracts typically earn up to 100,000 tenge ($190) per month. Shadow entrepreneurs may earn over 600,000 tenge ($1,130). Many struggle financially. Among respondents paid “in envelopes,” nearly 27% reported insufficient income for basic necessities. The Bureau of National Statistics of Kazakhstan reported 1.2 million informally employed citizens in 2023. Of these: 682,500 worked in legal enterprises without formal registration. 473,200 were employed in the informal sector without patents or tax payments. This group constitutes 12.8% of Kazakhstan's total employed population. Labor Minister Svetlana Zhakupova identified informal employment as the second most significant labor market challenge, after job scarcity. She highlighted discrepancies between official labor remuneration fund data and pension savings. In 2023, the labor remuneration fund was valued at 38 trillion tenge, yet pension contributions accounted for only 20 trillion tenge. Additionally, labor remuneration makes up just 30% of Kazakhstan’s GDP, significantly lower than the OECD average of 50%. The largest discrepancies were observed in the trade, agriculture, and real estate sectors.
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