«Despite the fact that youth unemployment in Kazakhstan is at a relatively low level, a large number of young people face certain barriers. The problem of the labor market in Kazakhstan is associated both with the imbalance of labor resources and employment opportunities as well as their quality », – Anna Alshanskaya stated, a senior researcher at the Kazakhstan Institute for Strategic Studies under the President of the Republic of Kazakhstan, a participant of the CABAR.asia School of Analytics.
Follow us on LinkedIn
Brief overview of the article:
- The youth segment, like the general labor market in Kazakhstan, remains quite unbalanced.
- The employment spheres of young specialists are closely related to the low level of income and labor productivity.
- The youth unemployment rate in 2018 was 3.9%, however, according to opinion polls – about 42% of young people constantly face problems with employment.
- The continuing gap between the professional orientation of young people and the needs of enterprises in the workforce is becoming one of the barriers to the employment of young people in the labor market.
- Further strengthening of negative trends in the youth labor market creates risks of growth in external migration and the informal sector of young people employment, as well as the increase in the category of NEET (Not in Education, Employment or Training) youth.
The scale of youth employment and unemployment in Kazakhstan attracts active attention, from government bodies, business, and the general population. Young people today are at risk group because they face significant hurdles while searching for a job. This is determined by many factors.
On one hand, knowledge and competencies of young people acquired in the education system often do not meet the requirements of employers. Many companies simply do not consider young professionals, since hiring them is much more expensive than hiring candidates with a service record and professional accomplishments.
On the other hand, young people themselves in some cases have exaggerated requirements for employment. Hence, many graduates of educational institutions are dissatisfied with wages and working conditions, which are offered to them by employers, thus refuse to work according to the acquired profession. Consequently, all of the above mentioned leads to low efficiency of employment, and also creates prerequisites for the growth of unemployment among young professionals.
What does Kazakhstan’s labor market offer for youth?
According to the Statistics Committee of the Ministry of National Economy of the Republic of Kazakhstan, youth (from 15 to 28 years old) make up about a quarter of the economically active population of Kazakhstan. Of these, the number of young people employed in Kazakhstan is 2 million.[1]
Moreover, the youth segment, like the general labor market in Kazakhstan, remains quite unbalanced.
First, young professionals are predominantly employed in the low-productive industries. Thus, in 2018, 16.7% of employed youth worked in the trade sector, 14.2% in agriculture, and 11.1% in education sphere.
Secondly, entrepreneurship remains not attractive enough for young people. The overwhelming proportion of employed youth is hired workers. Only 23.9% belong to self-employed youth. At the same time, it should be noted that self-employment in most cases in Kazakhstan is closely related to low income and labor productivity. So, in rural areas, where employment opportunities for job placement are quite low, self-employment is an alternative form of employment. Thus, a significant part of hired employees (64.2%) are based in the city and self-employed youth (66.4%) are based in the village.
Thirdly, the education level of employed young people also differs markedly. 42.9% of employed young people have higher and incomplete higher education. Moreover, there is a high differentiation between the hired youth (48.9% with higher education) and self-employed youth (only 25.2% with higher education).
Fourth, the differentiation of wages also remains quite high. According to the Committee on Statistics, in 2018 the average monthly nominal wage of working youth was approximately 115.4 thousand tenge,[2] which is almost one and a half times lower than the average monthly nominal wage in the economy as a whole. The lowest wages are in agriculture, health care and public administration sectors. The segment of well-paid youth covers only part of the employed young people.
Thus, youth in Kazakhstan labor market as a whole is a rather mobile part of the population. However, a question on the quality of the offered jobs arises here, which impedes the desire of young people for decent work. The labor market still offers employment mainly in industries with relatively low labor productivity and low wages. Moreover, the young population living in the city, in most cases chooses hired work, while the rural youth belong to self-employed due to the lack of jobs.
Youth unemployment: risk groups
As the Committee on Statistics of the Ministry of National Economy of the Republic of Kazakhstan notes, the level of youth unemployment is gradually decreasing and in 2018 it was 3.9%. In absolute terms, the number of unemployed youth decreased by 22 thousand people. Also, the level of long-term youth unemployment similarly falls from 2.4% in 2014 to 2.1% in 2018.[3] (See in diagram 2).
In general, the number of unemployed in the 4th quarter of 2018 was 78.5 thousand people. Young people up to 29 years old among the unemployed are 17.8%, including 8.5% at the age of 16-24, and 9.2% at the age of 25-28.[4]
However, the following trends are observed.
Firstly, youth unemployment in the city is at a relatively high level, which becomes a consequence of the “village-city” internal migration process.
Thus, the rural lifestyle is becoming increasingly unattractive for young people, and as a result, internal migration continues to increase in recent years. Thus, for the period 2015-2017 more than 340 thousand young people left the rural areas. The analysis of internal migration among young people indicates that, to a greater degree, young people are leaving the southern regions of Kazakhstan (excluding Almaty). Thus, the migration balance in the south of the country in 2017 was -18.7 thousand people, which is significantly higher than in the other regions: the northern region (-6689) people, the central region (-2967 people), the eastern region (-4613 people) and the western region (-166 people).[5] Traditionally, the southern regions of the country are characterized by a high level of natural growth and redundancy of labor resources. The availability of work or its absence, as well as the desire to receive education are important motivational factors for the outflow of young people from rural areas. And, as a rule, economic centers (mainly the city of Nur-Sultan, Almaty) attract migrant workers in great quantity. [6]
This situation undoubtedly has a significant impact on the well being of regional and local labor markets. Thus, according to statistics, unemployment among young people is most common in the rural areas and amounts to 3.3%, while in the city it is 4.4%.[7]
Secondly, the differentiation of unemployed youth by level of education. So, among the unemployed youth, 35.9% have higher and incomplete higher education, 39% – specialized secondary. At the same time, unemployment among young people with higher and incomplete higher education is 3.3%, among young people with secondary and vocational (special) education – 4.2%, with basic, secondary, general, primary – 4.8%.[8]
Third, unemployment among young women is slightly higher than that of men. Thus, women’s unemployment remained at 4.6% versus 3.4% for men. In addition, women from 25 to 28 years age group are significantly affected by unemployment (4.6%). At the same time, in 2018, the indicator for city residents was about 5.3%, in rural areas, 3.5%.[9]
Thus, the existing scale of youth unemployment shows an unstable position of this group of the population on the labor market. Moreover, the mobility of the young labor force only exacerbates the problems of employment and is a subject to a greater influence of unemployment.
Barriers to youth employment
Entering the labor market and having insufficient work experience and necessary professional knowledge and qualifications, young people face significant obstacles when trying to find a job.
According to the results of a sociological study, about 42% of young people surveyed constantly face problems with job placement, of which 47.5% are rural and 38.1% are urban youth.[10]
One of the important factors hindering the employment of young people in the labor market is the gap between the professional orientation of young people and the needs of enterprises in the labor force.[11]
So, according to statistics, the expected graduation rate of students (universities and colleges) in the period from 2013-2018 was 3 times higher than the expected need for workforce (including vacancies)[12] (see Diagram 3). It should be also taken into account that a significant proportion of the economically active population of different age groups also claims vacant positions.
Moreover, the education market in Kazakhstan is extremely differentiated, in terms of offered quality of education, in particular between city and village. This is largely due to the qualitative composition of the teaching staff, the existing infrastructure, financing, material and technical base, and so on. Consequently, the level of training received by young people creates the prerequisites for insufficient competitiveness among young specialists.
In addition, an important role is played by the factor of aspirations formation and incentives to work among young people. In other words, due to high expectations and self-esteem, some young people may refuse to be employed.
On the other hand, the development of entrepreneurship also has not become attractive enough for young people. According to a sociological study conducted by the Youth Research Center, to the question – whether the interviewed young people plan to open their business in the next three years, only 16.5% answered positively, out of which 17% are urban and 14.5% are rural youth. 51.3% of respondents have not planned to engage in business, and 32.3% of respondents have not thought about it. In addition, data from a sociological survey also showed the main problems that young entrepreneurs face. The most topical were – lack of start-up capital (55.7% of the respondents), high rents (32.4%), lack of business experience and tax reporting (22.0%).
For all those reasons mentioned above, there is a widespread tendency of employment among young people outside their specialty, employment of young graduates in jobs that do not require a high level of education, and so on.
Further strengthening of negative trends in the youth labor market can carry the following risks:
- Growth of external youth migration
A typical mechanism for solving problems in the domestic labor market for young people is educational or labor migration. According to statistics, the number of young emigrants from Kazakhstan is growing every year. The largest number of youth leaving their homeland falls on the CIS countries (90% of the number of youth leaving abroad).[13] Moreover, according to experts, the peak of mobility falls on the group of young people aged 24-28.[14]
- Growth of informal youth employment
According to the Committee on Statistics of the Ministry of National Economy of the Republic of Kazakhstan, 18.7% of unemployed young people are in search of work from 6 to 12 months, 23.3% from 3 to 6 months, which may push them to look for work in the informal sector.
It should be noted that, in general, in Kazakhstan, according to the Organization for Economic Cooperation and Development (OECD), young people who have completed vocational training in educational institutions begin working at the age of 21. By the age of 24, the overwhelming majority of young people become formally employed in the labor market, as they approach the choice of their employment form more consciously.[15] Therefore, a special place in the informal sector is occupied by young people aged 15-24 years, because they are the most socially vulnerable and it is more difficult to find a formal job for them. So, despite the fact that the proportion of informally employed youth of this age group, according to statistics, in the period from 2015-2017 decreased from 25.3% to 19.1% of the total number of employed youth of this age group, the level of informal youth employment remains higher than the national average (16.1% in 2017).[16]
- Increase in the category of NEET youth
One of the most important indicators of the transition from school to work for the labor market is the proportion of those who do not work and do not study, or the so-called NEET (Not in Education, Employment or Training) group. Today, this category of the population in Kazakhstan is making up 7% of the total number of young people.[17] Moreover, as a rule, unemployed young people are in the zone of increased risk of falling into the NEET-youth group, that is, those who do not have work, but are actively looking for it and are ready to start. In addition, there are quite high risks of falling into the category of NEET for rural youth. The lack of jobs in rural areas and the high costs of territorial mobility can lead to anchorage in the status of NEET group.
Conclusions and recommendations
The existing level of differentiation of youth employment is largely associated with objective economic conditions — the general economic situation, the labor market conditions, the sectorial structure of the economy, and so on. Despite the fact that youth unemployment in Kazakhstan is at a relatively low level, a large number of young people face certain barriers in the labor market. For example, rural areas do not provide a great variety in terms of employment opportunities, which is an important factor in increasing labor migration among young people. At the same time, the problem of the labor market in Kazakhstan is associated both with the imbalance of labor resources and jobs as well as their quality. The level of wages offered by employers to young people is markedly different in comparison to older age groups. However, this is a natural process and, as a rule, the level of income grows with experience. But at the same time, such situation undermines motivation and incentives to work.
In this regard, it is necessary to consider recommendations for improving the situation of young people on the labor market in Kazakhstan. So, the following measures are recommended:
- Improving the system of forecasting the labor market and the system of personnel training on the basis of increasing the efficiency of the interaction mechanism between educational institutions and business sector;
- Revision of the vocational guidance system for young people. The main goal should be the organization of information space, which allows obtaining comprehensive information about the professional world and their needs in a country, region, and a specific city and even in an enterprise, as well as on opportunities for further employment. At the same time, forms of vocational guidance should be varied: open door days, individual and group counseling, development of various benefits and employment guides, etc. Thus, the young population will form an adequate self-assessment of personal and professional qualities, as well as a real understanding of the modern labor market and the required specialties;
- Strengthening the mechanism for conducting short-term vocational training (retraining) of personnel using the elements of the dual training model. It is also important to improve distance learning technologies with the use of open banks of lectures, seminars and master classes of scientists and practitioners;
- Develop mentoring programs in youth entrepreneurship with the ability to attract successful entrepreneurs with experience in building sustainable business processes. A mentor’s support can be in form of regular meetings with young entrepreneurs, as well as advisory assistance or specific guidance in the conduct of business.
- The use of communication channels accessible to young people, including social networks, in order to widely publicize employment opportunities as well as training for young people under governmental and industrial programs, as well as private sector initiatives.
This article was prepared as part of the Giving Voice, Driving Change – from the Borderland to the Steppes Project implemented with the financial support of the Foreign Ministry of Norway. The opinions expressed in the article do not reflect the position of the editorial or donor.
[1] Committee on Statistics of the Ministry of National Economy of the Republic of Kazakhstan. Internet access: https://stat.gov.kz Official statistical information / Labor / Main indicators of youth labor market in Kazakhstan for 2001-2018 (quarterly data).
[2] Committee on Statistics of the Ministry of National Economy of the Republic of Kazakhstan. Internet access: https://stat.gov.kz Official statistical information / Labor / Salary of workers by profession (position) in certain types of economic activities of the Republic of Kazakhstan for 2018
[3] Committee on Statistics of the Ministry of National Economy of the Republic of Kazakhstan. Internet access: https://stat.gov.kz Official statistical information / Labor / Main indicators of youth labor market in Kazakhstan for 2001-2018 (quarterly data).
[4] Committee on Statistics of the Ministry of National Economy of the Republic of Kazakhstan. Internet access: https://stat.gov.kz Official statistical information / Labor / Main indicators of youth labor market in Kazakhstan for 2001-2018 (quarterly data).
[5] Youth of Kazakhstan. Statistical compilation / in Kazakh and Russian. Astana, 174 pages. Internet access: https://stat.gov.kz
[6] A. Alshanskaya, B. Syzdykov. Young people in the labor market: features and trends // Kazakhstan-Spectr. Science Magazine. 2017/3
[7] Committee on Statistics of the Ministry of National Economy of the Republic of Kazakhstan. Internet access: https://stat.gov.kz Official statistical information / Labor / Main indicators of the youth labor market (aged 15-28 years) by regions of the Republic of Kazakhstan and the level of education for 2001-2018.
[8] Committee on Statistics of the Ministry of National Economy of the Republic of Kazakhstan. Internet access: https://stat.gov.kz Official statistical information / Labor / Main indicators of youth labor market in Kazakhstan for 2001-2018 (quarterly data).
[9] Committee on Statistics of the Ministry of National Economy of the Republic of Kazakhstan. Internet access: https://stat.gov.kz Official statistical information / Labor / Main indicators of the labor market in the Republic of Kazakhstan for the 4th quarter of 2018
[10] National Report “Youth of Kazakhstan – 2018” – Astana, 2018. – 410 p. Internet access: http://eljastary.kz/articles/62/2
[11] The current condition of the labor market in Kazakhstan: a brochure / ed. Z.K. Shaukenova. – Astana: Kazakhstan Institute for Strategic Studies under the President of the Republic of Kazakhstan, 2017. – 100 p. http://kisi.kz/uploads/33/files/Dxun0PeD.pdf
[12] Committee on Statistics of the Ministry of National Economy of the Republic of Kazakhstan. Internet access: https://stat.gov.kz Official statistical information / Labor / Number and need for personnel of large and medium-sized enterprises of the Republic of Kazakhstan for 2018
[13] Youth of Kazakhstan. Statistical compilation / in Kazakh and Russian. Astana, 174 pages. Internet access: https://stat.gov.kz
[14] The National Report “Youth of Kazakhstan – 2018” – Astana, 2018. – 410 p. Internet access: http://eljastary.kz/articles/62/2
[15] OECD (2017), Building Inclusive Labour Markets in Kazakhstan: A Focus on Youth, Older Workers and People with Disabilities, OECD Publishing, Paris.
[16] Committee on Statistics of the Ministry of National Economy of the Republic of Kazakhstan. Internet access: https://stat.gov.kz Official statistical information / Labor / Informally employed population in the Republic of Kazakhstan for 2017
[17] Committee on Statistics of the Ministry of National Economy of the Republic of Kazakhstan. Internet access: https://stat.gov.kz Official statistical information / Labor / NEET share in the total number of young people aged 15-28 of the Republic of Kazakhstan (quarterly data)