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Earnings and Informality Choice Among the Self-Employed in Kazakhstan

In: Shadow Economies in Turkic Republics

Author

Listed:
  • Arlan Musayir

  • G. Reza Arabsheibani

    (London School of Economics)

  • Altay Mussurov

    (Enigma Seven)

  • Alma Kudebayeva

    (KIMEP University, Department of Economics)

  • Irina Kovaleva

    (KIMEP University, Department of Economics)

  • Dena Sholk

Abstract

Using data from the 2019 and 2022 Kazakhstan Labour Force Surveys, we examine earnings differentials between formal and informal self-employed workers and the determinants of informal self-employment. We find that the earnings gap between the formal self-employed and their informal counterparts increased almost fivefold between 2019 and 2022. The Oaxaca–Ransom estimation results show that the unexplained component primarily drove this widening gap. We also observe a slight increase in the predicted probability of informal self-employment after the pandemic. Our estimates indicate that the coefficient effect contributed to an increase in informality, implying that characteristics generally linked to lower informality had a stronger effect before the pandemic. Our analysis of individual contributions, based on the detailed Yun decomposition, indicates that university education was the most influential factor behind this change.

Suggested Citation

  • Arlan Musayir & G. Reza Arabsheibani & Altay Mussurov & Alma Kudebayeva & Irina Kovaleva & Dena Sholk, 2026. "Earnings and Informality Choice Among the Self-Employed in Kazakhstan," Springer Books, in: Elshan Bagirzadeh & Omer Gokcekus (ed.), Shadow Economies in Turkic Republics, chapter 4, pages 91-123, Springer.
    • Handle: RePEc:spr:sprchp:978-3-032-12872-0_4
    DOI: 10.1007/978-3-032-12872-0_4
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