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Building Inclusive Labour Markets in Kazakhstan A Focus on Youth, Older Workers, and People with Disabilities
Stefano Scarpetta,
Director for Employment, Labour, and Social Affairs
Astana, July 13th 2017
1. The Key Labour Market Challenges
2. Investing in Kazakhstani Youth
3. Working longer with age: Strengthening the Labour Market Outcomes of Older Workers
4. Breaking Down Labour Market Barriers for People with Disabilities
Outline of the presentation
2
1. THE KEY LABOUR MARKET CHALLENGES
3
Kazakhstan is doing well with regards to job quantity
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New
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Est
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Nor
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Sw
eden
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and
Indi
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outh
Afr
ica
Bra
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Indo
nesi
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ussi
an…
Chi
na
Taj
ikis
tan
Uzb
ekis
tan
Pak
ista
nA
fgha
nist
anK
yrgy
zsta
nA
zerb
aija
nK
azak
hsta
n
Inactivity rate
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Rep
ublic
Slo
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aP
olan
dP
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gal
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nce
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gium
Spa
inT
urke
yIta
lyG
reec
e
Chi
naR
ussi
an F
eder
atio
nIn
done
sia
Bra
zil
Indi
aS
outh
Afr
ica
Kaz
akhs
tan
Aze
rbai
jan
Kyr
gyzs
tan
Afg
hani
stan
Pak
ista
nU
zbek
ista
nT
ajik
ista
n
Employment rate
BRIICS OECD Central Asia
4
Source: OECD calculations based on the labour force survey; OECD stat database; ILO database.
But informality and self-employment are hampering job quality
0
10
20
30
40
50
60
70
80
90
100
Indi
a
Indo
nesi
a
Mex
ico
Col
ombi
a
Tur
key
Sou
th A
fric
a
Arg
entin
a
Cos
ta R
ica
Bra
zil
Kaz
akhs
tan
Urb
an C
hina
Chi
le
Rus
sia
Share of workers who are informal or self-employed
Informal Self-employed
%
What does informality and self-employment entail? … No protection by labour contracts … Little training or career advancement … Poor social security protection ... Lower wages
0
5
10
15
20
25
Lessthan 20
20 to 40 40 to 60 60 to 80 80 to100
100 to150
Over 150
%
Share of employees by income (in thousand KZT)
Self-employed and informal employees
Formal employees
20% of self-employed and informal employees earn less than the Minimum Wage
5 Source: OECD calculations based on the labour force survey; OECD (2016), Employment Outlook; OECD (2016), Multi-Dimensional Review of Kazakhstan.
Some groups are lagging behind: #1 disadvantaged youth
0
2
4
6
8
10
12
14
Men
Wom
en
Prim
ary
or b
elow
Sec
onda
ry
Ter
tiary
Akm
ola
Akt
obe
Alm
aty
Alm
aty
city
Ast
ana
city
Aty
rau
Eas
t Kaz
akhs
tan
Kar
agan
da
Kos
tana
y
Kyz
ylor
da
Man
gyst
au
Nor
th K
azak
hsta
n
Pav
loda
r
Sou
th K
azak
hsta
n
Wes
t Kaz
akhs
tan
Jam
byl
Gender Education Region
Youth NEET rates by socio-demographic characteristics
Percentage of youth (ages 15-29)
6 Source: OECD calculations based on the Labour Force Survey
Activity status of older people
Some groups are lagging behind: #2 older workers
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
50 55 60 65 70
MenInactive & not in education Unemployed
Informal Self-employed
Employed Education or training
50 55 60 65 70
Women
Inactive & not in education Unemployed
Informal Self-employed
Employed Education or training
Reti
rem
en
t ag
e =
58
Reti
rem
en
t ag
e =
63
7
Source: OECD calculations based on the Labour Force Survey
Some groups are lagging behind: #3 people with disabilities
0
10
20
30
40
50
60
70
Sw
eden
Ger
man
y
Den
mar
k
Luxe
mbo
urg
Fin
land
Fra
nce
Net
herla
nds
Aus
tria
Slo
vaki
a
Slo
veni
a
Est
onia
OE
CD
-EU
Uni
ted
Kin
gdom Ita
ly
Por
tuga
l
Cze
ch R
epub
lic
Bel
gium
Pol
and
Spa
in
Hun
gary
Gre
ece
Kaz
akhs
tan
% Employment rate of people with disabilities
Source: Agency of Statistics of the RK; Eurostat. 8
2. INVESTING IN KAZAKHSTANI YOUTH
9
10
Youth: Key recommendations
Strengthening the role of Public Employment Services
Investing further in Active Labour Market Policies
Providing more adequate income support
Investing in the skills of youth
Reshaping family policies
Strengthening the role of the Public Employment Service
67
%
9%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Bel
gium
Fin
land
Fra
nce
Spa
inP
ortu
gal
Slo
veni
aD
enm
ark
Ger
man
yP
olan
dO
EC
D-E
urop
eIc
elan
dLu
xem
bour
gS
wed
enH
unga
ryG
reec
eS
witz
erla
ndA
ustr
iaIta
lyE
ston
iaN
ethe
rland
sU
nite
d K
ingd
omK
azak
hsta
n
Registration with PES Percentage of youth unemployed
Source: OECD calculations based on the information received by the Ministry of Healthcare
and Social Development of RK.
Poor targeting: 70% have VET or
university
Why is registration low ?
Many jobseekers doubt PES can help
Low generosity of benefits
Registration does not entail access to certain benefits
Vacancy bank has few and low-quality job openings
Investing further in Active Labour Market Policies
0.27
00.20.40.60.8
11.21.41.6
Den
mar
kS
wed
enF
inla
ndIr
elan
dH
unga
ryF
ranc
eLu
xem
bour
gA
ustr
iaN
ethe
rland
sS
pain
Bel
gium
Por
tuga
lS
witz
erla
ndN
orw
ayP
olan
dG
erm
any
Italy
Slo
veni
aK
orea
Kaz
akhs
tan
Gre
ece
Cze
ch R
epub
licN
ew Z
eala
ndS
lova
ck R
epub
licIs
rael
Can
ada
Est
onia
Japa
nU
nite
d S
tate
sA
ustr
alia
Chi
leU
nite
d K
ingd
omM
exic
o
OECD average = 0.4
Expenditures on ALMPs (% of GDP)
What additional challenges ?
Impact evaluation studies are lacking
Weak targeting
to people most in need
Funding skewed towards poorest regions
4.3
05
10152025303540
Hun
gary
Fra
nce
Italy
Por
tuga
l
Spa
in
Bel
gium
Aus
tria
OE
CD
-Eur
ope
Luxe
mbo
urg
Ger
man
y
Irel
and
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vaki
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Fin
land
Sw
eden
Kaz
akhs
tan
Den
mar
k
Pol
and
Slo
veni
a
Gre
ece
Nor
way
Net
herla
nds
Est
onia
<25 Total
% Participation in ALMPs (% of labour force)
Source: OECD calculations based on the information received by the Ministry of Healthcare and Social Development of RK; OECD stat.
OECD average = 9.8
Providing more adequate income support
64 % 10.5 months
31% 6 months
0
5
10
15
20
25
30
35
40
0
20
40
60
80
100
Bel
gium
Isra
elS
love
nia
Den
mar
kLu
xem
…S
pain
Icel
and
Net
her…
Por
tuga
lS
witz
e…Ita
lyJa
pan
Fra
nce
Hun
gary
Nor
way
Cze
ch…
Can
ada
OE
CD
Sw
eden
Slo
vak…
Uni
ted…
Fin
land
Ger
man
yC
hile
Aus
tria
Kor
eaE
ston
iaT
urke
yIr
elan
dP
olan
dG
reec
eN
ew…
Kaz
ak…
Aus
tral
iaU
nite
d…
Months
Percentage of previous net
earnings
Net replacement rate (NRR)
Maximum benefit duration (right-side scale)
Unemployment Benefits
Other income support ?
Severance pay (only 1 monthly wage)
Unemployment
assistance (inexistent)
Source: OECD calculations based on the information received by the Ministry of
Healthcare and Social Development of RK; OECD Tax and Benefit database.
8 %
0
10
20
30
40
50
Net
herla
nds
Icel
and
Irel
and
Luxe
mbo
urg
Den
mar
kB
elgi
umJa
pan
Spa
inA
ustr
iaN
ew Z
eala
ndA
ustr
alia
Fra
nce
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nia
Por
tuga
lG
erm
any
Fin
land
Sw
itzer
land
Can
ada
Kor
eaU
nite
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olan
dN
orw
ayS
wed
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zech
…S
lova
k…H
unga
ryE
ston
iaLa
tvia
Kaz
akhs
tan
Uni
ted
Sta
tes
Chi
le
%
OECD average = 25.9 %
Social Assistance Benefits Net income value in % of median incomes
Ineffective take-up: poorest regions have the lowest coverage
Rush it to poorly-
matched, subsistence-
level jobs?
Coverage: 2 % of unemployed youth
Investing in the skills of youth
Key labour market indicators for youth (15-28) by level of education
0
1
2
3
4
5
6
7
8
0
10
20
30
40
50
60
70
80
90
100
Labour force participation rate Employment-to-population ratio Unemployment rate (right-sidescale)
Basic secondary education General secondary education
Secondary vocational education Higher education
Source: ILO (2015), Jobs and Skills for Youth: Review of Policies for Youth Employment of Kazakhstan, International Labour Organization.
Reshaping family policies
Encouraging fathers to take child-related leave
o There is no leave for exclusive use of fathers o No financial incentives for fathers to take parental leave (women earn 68% of men’s
wages)
Facilitating access to good-quality childcare
o Only 8.5% of children 0-2 enrol in childcare (OECD 33%) o Regional and wealth disparities: long waiting lists; private care 2/3 times as
expensive
Strengthening the income support available to parents
o Family cash benefits are inadequate (low generosity; not adjusted by n. children; no
benefits for sole parents) o Red tape (many families who are entitled do not apply)
3. WORKING LONGER WITH AGE:
STRENGTHENING THE LABOUR MARKET OUTCOMES OF
OLDER WORKERS
16
17
Older Workers: Key Recommendations
Strengthening the employability of older workers
Making work rewarding for older workers older workers
Encouraging employers to hire and retain older workers
Ensure that lifelong learning policies encourage continuous upgrading of skills over the working life
18
Strengthening the employability of older workers
0
10
20
30
40
50
60
70
80
90
Eas
t Asi
a &
Pac
ific
OE
CD
Latin
Am
eric
a &
Car
ibbe
an
Hig
h in
com
e no
nOE
CD
All
Cou
ntrie
s
Eas
tern
Eur
ope
& C
entr
al…
Sub
-Sah
aran
Afr
ica
Sou
th A
sia
Mid
dle
Eas
t & N
orth
Afr
ica
Chi
na (
2012
)
Rus
sian
Fed
erat
ion
(201
2)
Bra
zil (
2009
)
Sou
th A
fric
a (2
007)
Indi
a (2
014)
Kaz
akhs
tan
(201
3)
Indo
nesi
a (2
009)
Irel
and
(200
5)
Sw
eden
(20
14)
Chi
le (
2010
)
Cze
ch R
epub
lic (
2013
)
Spa
in (
2005
)
Mex
ico
(201
0)
Slo
vak
Rep
ublic
(20
13)
Slo
veni
a (2
013)
Ger
man
y (2
005)
Est
onia
(20
13)
Pol
and
(201
3)
Por
tuga
l (20
05)
Tur
key
(201
3)
Gre
ece
(200
5)
Isra
el (
2013
)
Hun
gary
(20
13)
Percent of firms offering formal training
OECD BRIICS and
Kazakhstan
World region
Source: World Bank Entreprise Survey.
(1) Ensure that adequate old-age pensions are provided to the elderly
Making work rewarding for older workers (1)
63
44
.9
0
20
40
60
80
100
120
IND
(58
)T
UR
(65
)N
LD (
67)
AU
T (
65)
HU
N (
65)
PR
T (
66)
ES
P (
65)
LUX
(60
)A
RG
(65
)R
US
(60
)S
VK
(67
)C
HN
(60
)IT
A (
67)
ISL
(67)
BR
A (
55)
ISR
(67
)F
RA
(63
)D
NK
(67
)S
AU
(45
)C
ZE
(68
)S
WE
(65
)F
IN (
65)
OE
CD
34B
EL
(65)
NO
R (
67)
ES
T (
65)
AU
S (
67)
SV
N (
60)
GR
C (
62)
PO
L (6
7)D
EU
(65
)C
HE
(65
)K
OR
(65
)K
AZ
(63
)U
SA
(67
)N
ZL
(65)
CA
N (
67)
IRL
(68)
JPN
(65
)G
BR
(68
)C
HL
(65)
ME
X (
65)
IDN
(55
)Z
AF
(60
)
Net replacement rates at retirement age, projections 2057
19 Note: data refer to people previously earning average wages.
Source: OECD calculations based on the OECD Pension Models.
Low life expectancy
Underdeveloped financial services
Informality
Misinformation
Coverage is low Why
(2) Enhance incentives to work beyond retirement age for those still able to work
Making work rewarding for older workers (2)
Only 13% of pensioners work, 50% of them do so informally. Why
1. Few possibilities to work part-time (after retirement, only 5% of dependent employees work part-time).
2. Partial or deferred withdrawal is not possible by law.
3. Kazakhstani Pension System provides weak financial incentives to work past retirement.
Continue efforts to better align wages to productivity and qualifications, rather than seniority
Change employers’ perceptions of older workers and address discrimination in employment on the basis of age
Continue efforts to ease employment protection legislation around older workers, but combine them with adequate income support and activation measures
Encouraging employers to hire and retain older workers
21
4. BREAKING DOWN LABOUR MARKET BARRIERS FOR
PEOPLE WITH DISABILITIES (PWD)
22
23
People with Disabilities: Key Recommendations
Averting old stereotypes and strengthening anti-discrimination law
Supporting activation-oriented assessments of PWD
Making more effective use of employment quotas
Averting old stereotypes and strengthening anti-discrimination law
24
Promote a “people first” language o Legislation on disability policy often uses the word “invalid”, rather than
“person with disability”
o Differentiations by categories of clients (such as, “the blind”; “the deaf”) still existent
Ensure that decisions based on the ground of disability be taken following a concerted approach o Firm can discriminate on the ground of disability (when there is a need to protect (i) the health
of the PWD (ii) and/or the safety of others).
o Burden of the proof is on the employers.
Supporting activation-oriented assessments of People with Disabilities
Assess work capacity, not disability: o IRP remains strongly focused on the medical diagnosis o 3/5 members of the Medical and Social Expert (MSE) committee are doctors – the other are
clerical staff o Few PWD receive the social and vocational assessment
Treat each claim for a disability benefit as a request for rehabilitation:
o There is too little focus on the Individual Rehabilitation Plan (IRP) o Only ¼ of PWD have access to an IRP o 1/2 are not even aware of its existence
Consider introducing some flexibility in the system of re-assessments at fixed time intervals:
o Most PWD (95%) are confirmed as disabled after re-assessment o MSE Committees are understaffed o Evaluation procedures tend to be a “box ticking” exercise
Key challenge:
Only 1/3 of quota jobs are filled by PWD
Why?
o Quota jobs used to keep existing workers with emerging health problems
o Firms struggle to find PWD with the right qualifications
o Burdensome adjustment costs (e.g. accommodation costs; lawsuits)
Possible areas for improvements:
o Fix quotas realistically in each geographic area/region
o Give priority to people with most severe disability
o Impose levies (rather than fines)
Making more effective use of employment quotas
26
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27
