Unemployment in Kazakhstan Rises to 4.6% Amidst Persisting Structural Challenges
Labor Market Trends and Government Policies in Kazakhstan
In Kazakhstan, the labor market is undergoing significant changes, with digitalization, population growth, and economic shifts shaping its dynamics. The unemployment rate remained at a record low of 4.6% as of 2024, according to Askar Biakhmetov, Vice Minister of Labour and Social Protection of the Population.
Digitalization and New Professions
The growing demand for digital specialists, such as IT professionals, drone operators, tutors, and e-commerce roles, is driving the shift towards a more digitally-focused economy. This transformation is reshaping the job landscape, creating new opportunities while also necessitating upskilling and the development of new professional standards.
Population Growth and Workforce Expansion
With about 360,000 young people entering the labor force annually until 2035, job demand is set to intensify. This demographic trend, combined with the emergence of new sectors, will require approximately 3 million skilled workers in the next 3-5 years, particularly in public services, business, logistics, industry, construction, and agriculture.
Mismatch of Skills
While some traditional professions become obsolete, new sectors require upskilling and new professional standards. To address this challenge, the government is placing emphasis on revising educational programs, vocational training, and workforce retraining to meet new labor demands and close skill gaps.
Regional Disparities
Labor surpluses exist in southern regions while northern parts face shortages. Internal migration towards major cities creates urban and infrastructure pressures, necessitating targeted policies to address regional imbalances.
Shadow Economy
Approximately 30% of workers are employed informally without pension system contributions, mainly in sectors lacking labor standards. This informal employment remains a challenge to social protection and taxation, and measures are being sought to reduce shadow employment and bring more workers into formal social protection systems.
Flexible Employment
Technological and social factors are key drivers supporting flexible work arrangements in Kazakhstan's evolving labor market.
Gender Pay Gap
Despite progress in education and workforce participation, women earn significantly less than men, with the gap widening to 25.2% in 2022. Women earn roughly 67% of male wages on average, with disparities especially strong in banking, construction, and transportation. The gender pay gap is compounded by underrepresentation in leadership positions and women's tendency to take career breaks to have and raise children.
Government Approaches to Labor Market Development
To address these challenges, the government is focusing on education, labor standards modernization, and social protections. Key initiatives include:
- Revising educational programs, vocational training, and workforce retraining to meet new labor demands and close skill gaps.
- Adjusting professional standards to prioritize emerging professions and sectors with high labor demand.
- Implementing measures to reduce shadow employment and bring more workers into formal social protection systems.
- Introducing key performance indicators (KPIs) for local government leaders regarding employment growth to promote accountability.
- Maintaining a 40-hour workweek, regulating overtime pay, probation periods, and mandating social tax contributions, with recent increases in social taxes to strengthen social benefits for workers.
In summary, Kazakhstan's labor market is adapting to digitalization, demographic growth, and economic changes, confronting challenges such as skill mismatches, regional imbalances, informal employment, and persistent gender pay inequality through targeted government policies centered on education, labor standards modernization, and social protections.
Additional Information
- The number of employed workers in Kazakhstan is 7.1 million, while the number of self-employed is 2.1 million.
- State support measures in Kazakhstan include short-term professional training, business training courses, and grants to start a business.
- Kazakhstan is classified as an upper-middle income economy.
- Women in Kazakhstan tend to work in lower-paid fields like education and healthcare.
- Prime Minister Olzhas Bektenov highlighted the country's target to employ 3.3 million citizens by 2030, including 2.3 million young people.
- The projected demand for workers in the medium term stands at nearly three million people.
- Biakhmetov highlighted three key trends in the labor market: digitalization and automation, rise of platform-based employment and e-commerce, and the annual influx of young people into the labor market.
In the context of Kazakhstan's labor market development, the government is prioritizing policies to address skills mismatches and closures in professional standards, particularly in response to the digitalization and emergence of new professions such as IT professionals, drone operators, tutors, and e-commerce roles.
Moreover, with about 360,000 young people entering the labor force annually until 2035, the government is also focusing on revising educational programs and vocational training to meet new labor demands and close skill gaps, as it strives to provide approximately 3 million skilled workers for the next 3-5 years in sectors like public services, business, logistics, industry, construction, and agriculture.
