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Informal employment in Kazakhstan: a blessing in disguise?

Author

Listed:
  • Altay Mussurov

    (KIMEP University)

  • Dena Sholk

    (IHS Markit)

  • G. Reza Arabsheibani

    (London School of Economics
    University of Roehampton
    IZA Institute of Labor Economics)

Abstract

Informality is heterogeneous, dynamic and difficult to quantify; the formal–informal gap in earnings is one major component of it that we wish to examine. Using the 2013 Kazakhstan Labor Force Survey, we analyze the returns that formal and informal workers receive for a given set of characteristics and also use a matching technique to decompose the gap. We observe that in Kazakhstan, there is a substantial earnings gap in favor of formal workers and that a quarter of the gap remains unexplained. Our study also highlights the importance of matching-based decomposition and distributional analysis in explaining the differences in earnings between formal and informal workers.

Suggested Citation

  • Altay Mussurov & Dena Sholk & G. Reza Arabsheibani, 2019. "Informal employment in Kazakhstan: a blessing in disguise?," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 9(2), pages 267-284, June.
    • Handle: RePEc:spr:eurase:v:9:y:2019:i:2:d:10.1007_s40822-018-0117-1
    DOI: 10.1007/s40822-018-0117-1
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    More about this item

    Keywords

    Formal and informal sectors; Labor policy; Post transition economies;
    All these keywords.

    JEL classification:

    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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