The Government of Kazakhstan is concerned with informal employment. The reasons for the concerns
are threefold. First, informality means that many workers lack adequate social security. Second,
informal employment is deemed to be of low-productivity, and as such hampers the modernization of
the Kazakh economy. Finally, informality implies less budget revenues and accordingly lower provision
of public services. The promotion of formal employment is thus a way to enhance social welfare. A
higher share of formal employment is considered a sign of a more modern and better performing
economy.
The objective of this report is to inform the discussion of informality in Kazakhstan, and to contribute to
the development of an evidence-based policy to promote formality. To this end the report examines
four broad issues. First, it determines the size and profile of informal employment in Kazakhstan.
Second, it identifies main obstacles to formality. Third, it assesses the potential gains from
formalization. And fourth, it recommends ways to promote formal employment in Kazakhstan. In
addition, the report points to areas where further research is needed in order to better understand the
nature and causes on informality in Kazakhstan.