Earnings and Informality Choice Among the Self-Employed in Kazakhstan

Arlan Musayir (), G. Reza Arabsheibani (), Altay Mussurov (), Alma Kudebayeva (), Irina Kovaleva () and Dena Sholk ()
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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

Chapter 4 in Shadow Economies in Turkic Republics, 2026, pp 91-123 from Springer

Abstract: 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.

Keywords: Informal self-employment; Earnings decomposition; Kazakhstan (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-032-12872-0_4

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DOI: 10.1007/978-3-032-12872-0_4

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