One in three employed individuals in Kazakhstan has informal employment, exposing themselves to all associated risks, including a lack of social guarantees, protection of labor rights, and future pension security, reports inbusiness.kz citing Energyprom.
These findings come from the study "Features of the Labor Market and Employment in Kazakhstan," conducted by analysts at Adam Research. According to survey results, 36.4% of respondents with income reported having informal employment. This figure is higher among men (37.6%) and slightly lower among women (34.9%).
The reported figure is referred to by the authors as the cumulative index of informality. It aggregates three subtypes of individuals engaged in the informal economy: those working without a labor contract in the "gray" sector; entrepreneurs who conceal their income from the government; and unemployed individuals taking on casual work. The largest contribution to the index of informal employment comes from workers receiving "envelope" wages, accounting for 16.6%. This proportion remains significant regardless of gender. The share of respondents engaging in shadow entrepreneurship is only slightly lower at 13.6%. Meanwhile, the proportion of those without permanent jobs, relying on casual work without formal documentation, is much lower at 6.2%. A significant portion of these informally employed individuals consists of youth and retirees.
The Adam Research study was conducted from June 12 to August 21, 2024, using telephone surveys of a randomly generated sample of mobile numbers among the population of Kazakhstan aged 18 and older. The survey covers 17 regions and 3 cities of national significance. The sampling error is less than 4%.
The study's results identified regions with higher levels of informal employment. This assertion is particularly relevant to the southern part of the country—specifically, the Turkestan and Almaty regions, as well as Shymkent. The proportion of individuals working in the shadow economy there exceeds 30% of the regional population. The lowest rates of informal employment are observed in the East Kazakhstan (14.8%), Ulytau (19%), and Aktobe (20.4%) regions.
"The southern regions are characterized by developed agriculture, cross-border trade, and a significant share of ethnic minorities. Here, the informal economy has a 'traditional' nature, historically associated with certain spheres of employment. Economically developed regions—Astana, Almaty, Atyrau, and Pavlodar—exhibit a level of informal economy slightly above the average, alongside a high overall employment rate. In these areas, the choice of informal employment can be viewed as a rational strategy for obtaining additional income," the study notes.
As for the western regions, they display some of the highest indices of shadow entrepreneurship. In the west of the country, informal employment of this nature can serve as a compensatory mechanism for individuals attempting to find formal work.
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The socio-demographic characteristics of respondents engaged in informal employment allow for a profile of a Kazakhstani working in the shadow economy. They may reside in either urban or rural areas, possess vocational or only secondary education, and work in fields unrelated to their training. The personal income of informally employed individuals is modest: up to 100,000 tenge. However, this aspect can be ambiguous: those working in the "gray" sector or relying on casual work often cite low wages. In contrast, shadow entrepreneurs tend to have above-average incomes: 20.5% of respondents in this category earn 600,000 tenge or more.
Here’s how informally employed Kazakhs describe their family’s financial situation. According to the survey, 26.8% of those receiving "envelope" wages report that their income is often insufficient even for basic necessities. In contrast, only 9.4% say that this "gray" income meets their essential needs and allows for savings. Among shadow entrepreneurs, the situation is better: 19.7% of these respondents indicate that they live comfortably, while another 13.9% manage to save in addition to covering their basic expenses. Among the most vulnerable group of individuals with casual jobs, very few report financial security: only 5%.
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According to official data from the information-analytical system "Taldau" of the National Statistics Bureau (NSB) of the Republic of Kazakhstan, there were 1.2 million informally employed individuals in Kazakhstan last year. Of these, the majority—682.5 thousand people—worked in the formal sector of the economy, meaning they were employed by legal enterprises but without a labor contract, relying on verbal agreements. Compared to 2022, this number has increased by 3.6%. A smaller portion of shadow economy workers—473.2 thousand people—belonged to the informal labor sector. This group included those working for an employer without a patent, license, or registration, or providing services or producing goods without paying taxes on such activities. NSB experts estimate the share of such workers at 12.8% of the total employed population.
The Minister of Labor and Social Protection of the Population of Kazakhstan, Svetlana Jakupova, considers informal employment to be the second key issue in Kazakhstan's labor market, following the insufficiently active job creation by businesses. During a government hour in the Mazhilis of Parliament, the head of the ministry reported significant discrepancies between official data on the wage fund and the actual amounts of pension contributions. For instance, last year the NSB reported a wage fund for Kazakhs at 38 trillion tenge, while pension contributions indicated that officially Kazakhs earned only 20 trillion tenge for their labor. A similar situation was observed in the country in 2022. The most significant discrepancies were noted in the sectors of trade, agriculture, and real estate transactions.
"Wages account for 30% of GDP (by income method—editor's note), while 60% is attributed to gross business profit. This is the opposite of what happens in OECD countries. There, the situation is such that wages for hired workers exceed 50%, while business income accounts for 20% to 30%," noted the Minister of Labor.
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