Building inclusive labour markets in kazakhstan

1. 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

2. 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

3. 1. THE KEY LABOUR MARKET
CHALLENGES
3

4. Kazakhstan is doing well with regards to job quantity
0
10
20
30
40
50
60
70
80
Italy
Turkey
Greece
Belgium
France
Poland
Slovenia
Portugal
Czech…
Spain
Japan
Slovak…
Mexico
Chile
Hungary
OECD…
Luxembourg
Latvia
Ireland
Germany
Austria
Denmark
Korea
UnitedStates
United…
Israel
Netherlands
Australia
Canada
Finland
Switzerland
NewZealand
Estonia
Norway
Sweden
Iceland
India
SouthAfrica
Brazil
Indonesia
Russian…
China
Tajikistan
Uzbekistan
Pakistan
Afghanistan
Kyrgyzstan
Azerbaijan
Kazakhstan
Inactivity rate
0
10
20
30
40
50
60
70
80
90
Iceland
Norway
Sweden
Switzerland
Estonia
NewZealand
Canada
Australia
Israel
Korea
Netherlands
Finland
UnitedKingdom
UnitedStates
Denmark
Japan
Germany
Austria
Mexico
CzechRepublic
Luxembourg
Chile
OECDcountries
Hungary
Ireland
Latvia
SlovakRepublic
Slovenia
Poland
Portugal
France
Belgium
Spain
Turkey
Italy
Greece
China
RussianFederation
Indonesia
Brazil
India
SouthAfrica
Kazakhstan
Azerbaijan
Kyrgyzstan
Afghanistan
Pakistan
Uzbekistan
Tajikistan
Employment rate
BRIICSOECD Central Asia
4
Source: OECD calculations based on the labour force survey; OECD stat database; ILO database.

5. But informality and self-employment are hampering job quality
0
10
20
30
40
50
60
70
80
90
100
India
Indonesia
Mexico
Colombia
Turkey
SouthAfrica
Argentina
CostaRica
Brazil
Kazakhstan
UrbanChina
Chile
Russia
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
Less
than 20
20 to 40 40 to 60 60 to 80 80 to
100
100 to
150
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
5Source: OECD calculations based on the labour force survey; OECD (2016), Employment Outlook; OECD (2016), Multi-Dimensional Review of Kazakhstan.

6. Some groups are lagging behind: #1 disadvantaged youth
0
2
4
6
8
10
12
14
Men
Women
Primaryorbelow
Secondary
Tertiary
Akmola
Aktobe
Almaty
Almatycity
Astanacity
Atyrau
EastKazakhstan
Karaganda
Kostanay
Kyzylorda
Mangystau
NorthKazakhstan
Pavlodar
SouthKazakhstan
WestKazakhstan
Jambyl
Gender Education Region
Youth NEET rates by socio-demographic
characteristics
Percentage of youth (ages 15-29)
6Source: OECD calculations based on the Labour Force Survey

7. 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
Men
Inactive & 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
Retirementage=58
Retirementage=63
7
Source: OECD calculations based on the Labour Force Survey

8. Some groups are lagging behind: #3 people with disabilities
0
10
20
30
40
50
60
70
Sweden
Germany
Denmark
Luxembourg
Finland
France
Netherlands
Austria
Slovakia
Slovenia
Estonia
OECD-EU
UnitedKingdom
Italy
Portugal
CzechRepublic
Belgium
Poland
Spain
Hungary
Greece
Kazakhstan
% Employment rate of people with disabilities
Source: Agency of Statistics of the RK; Eurostat. 8

9. 2. INVESTING IN KAZAKHSTANI
YOUTH
9

10. 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

11. Strengthening the role of the Public Employment Service
67%
9%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Belgium
Finland
France
Spain
Portugal
Slovenia
Denmark
Germany
Poland
OECD-Europe
Iceland
Luxembourg
Sweden
Hungary
Greece
Switzerland
Austria
Italy
Estonia
Netherlands
UnitedKingdom
Kazakhstan
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

12. Investing further in Active Labour Market Policies
0.27
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
Denmark
Sweden
Finland
Ireland
Hungary
France
Luxembourg
Austria
Netherlands
Spain
Belgium
Portugal
Switzerland
Norway
Poland
Germany
Italy
Slovenia
Korea
Kazakhstan
Greece
CzechRepublic
NewZealand
SlovackRepublic
Israel
Canada
Estonia
Japan
UnitedStates
Australia
Chile
UnitedKingdom
Mexico
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
0
5
10
15
20
25
30
35
40
Hungary
France
Italy
Portugal
Spain
Belgium
Austria
OECD-Europe
Luxembourg
Germany
Ireland
Slovakia
Finland
Sweden
Kazakhstan
Denmark
Poland
Slovenia
Greece
Norway
Netherlands
Estonia
<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

13. 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
Belgium
Israel
Slovenia
Denmark
Luxem…
Spain
Iceland
Nether…
Portugal
Switze…
Italy
Japan
France
Hungary
Norway
Czech…
Canada
OECD
Sweden
Slovak…
United…
Finland
Germany
Chile
Austria
Korea
Estonia
Turkey
Ireland
Poland
Greece
New…
Kazak…
Australia
United…
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
Netherlands
Iceland
Ireland
Luxembourg
Denmark
Belgium
Japan
Spain
Austria
NewZealand
Australia
France
Israel
Slovenia
Portugal
Germany
Finland
Switzerland
Canada
Korea
United…
Poland
Norway
Sweden
Czech…
Slovak…
Hungary
Estonia
Latvia
Kazakhstan
UnitedStates
Chile
%
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

14. 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-side
scale)
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.

15. 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)

16. 3. WORKING LONGER WITH AGE:
STRENGTHENING THE LABOUR
MARKET OUTCOMES OF
OLDER WORKERS
16

17. 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

18. 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
EastAsia&Pacific
OECD
LatinAmerica&Caribbean
HighincomenonOECD
AllCountries
EasternEurope&Central…
Sub-SaharanAfrica
SouthAsia
MiddleEast&NorthAfrica
China(2012)
RussianFederation(2012)
Brazil(2009)
SouthAfrica(2007)
India(2014)
Kazakhstan(2013)
Indonesia(2009)
Ireland(2005)
Sweden(2014)
Chile(2010)
CzechRepublic(2013)
Spain(2005)
Mexico(2010)
SlovakRepublic(2013)
Slovenia(2013)
Germany(2005)
Estonia(2013)
Poland(2013)
Portugal(2005)
Turkey(2013)
Greece(2005)
Israel(2013)
Hungary(2013)
Percent of firms offering formal training
OECDBRIICS and
Kazakhstan
World region
Source: World Bank Entreprise Survey.

19. (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)
TUR(65)
NLD(67)
AUT(65)
HUN(65)
PRT(66)
ESP(65)
LUX(60)
ARG(65)
RUS(60)
SVK(67)
CHN(60)
ITA(67)
ISL(67)
BRA(55)
ISR(67)
FRA(63)
DNK(67)
SAU(45)
CZE(68)
SWE(65)
FIN(65)
OECD34
BEL(65)
NOR(67)
EST(65)
AUS(67)
SVN(60)
GRC(62)
POL(67)
DEU(65)
CHE(65)
KOR(65)
KAZ(63)
USA(67)
NZL(65)
CAN(67)
IRL(68)
JPN(65)
GBR(68)
CHL(65)
MEX(65)
IDN(55)
ZAF(60)
Net replacement rates at retirement age, projections 2057
19Note: 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

20. (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.

21. 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

22. 4. BREAKING DOWN LABOUR
MARKET BARRIERS FOR
PEOPLE WITH DISABILITIES
(PWD)
22

23. 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

24. 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.

25. 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

26. 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

27. Contacts:
stefano.scarpetta@oecd.org ;
alessandro.goglio@oecd.org ;
alessia.forti@oecd.org .
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Site Web: www.oecd.org/els
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Thank you!
27