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How does the structure of the labor market reflect the level of development of the country's economy?

May 29, 2020

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Kuanysh Saiduova

senior analyst

The purpose of the analysis is to determine the regional specialization of the regions and the further vector of development.

In order to analyze the labor market, we used indicators on employment in the context of industries and regions of the Republic of Kazakhstan in the most accessible dynamics (1997-2019). The following industry groupings were used to determine regional specialization:

- agriculture, forestry and fisheries (hereinafter referred to as agriculture);

- manufacturing industry;

- business services (according to the NAICS classification, it includes CCEA Finance and insurance, real estate operations and professional activities).

Conclusions:
1.    Kazakhstan is still an agricultural country. The structure of employment for 2019 is as follows (the share of employees in the sector of the total number of employees): agriculture-13.5%, industry-12.5%, business services-6.8%.

2.    However, when considering the dynamics, there is a noticeable drop in employment in agriculture (by 24%) and industry (by 7%) and growth in business services (by 4.3 times since 1998).

3.    At the same time, the maximum share of people employed in agriculture was observed in 2001 – 35%, in industry in 1997 – 18.3%, in business services in 2019-6.8%.

4.    The specialization of regions looks like this (Fig. 1):
- agriculture - Akmola, Almaty, Zhambyl, West Kazakhstan, Kostanay, North Kazakhstan, Turkestan oblasts;
- industry – Aktobe (since 2013), Atyrau (since 2006), East Kazakhstan (since 2015), Karaganda (throughout the period), Kyzylorda (since 2017), Mangystau (throughout the period), Pavlodar (since 2013), Shymkent oblasts;
- business services - Almaty (since 2005), Nur-Sultan (since 2006).

5.    Regions that specialize in the agricultural sector differ in their share of industrial employment. The Northern regions also have a significant share of employment in industry (8.2-13.2%), while in the southern regions the share of industry is small (4.5-8.1%).

Given the fact that as the economic growth of the employed population moves from agricultural sector to manufacturing and then to services, it can be concluded that the purpose of the economic development the country needs to strengthen the manufacturing sector, especially in the southern regions, to address imbalances in economic development.

Sources: employment data of the Committee on Statistics of MNE of the Republic of Kazakhstan. NAICS classification - Parilla, D. (2015). Global metromonitor 2014: uncertain recovery. Brookings Institution. S. Das, A. Mourmouras, P.C. Rangazas, (2015), Economic growth and development. A dynamic dual economy approach.
* Since 2015, the method of calculating employment in accordance with the new employment standards (the 19th ICLS of the ILO)

 

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