Defining the Labour Market to Ensure Social Protection for All

LaborAbout 8.6 million people or 68 percent of the population aged 15 and older were employed in various areas of the domestic economy in 2013. Compared to the previous year, this was an increase of 63.5 thousand people (0.7 percent). More than half of the employed, 4.4 million were men; 48.8 percent, 4.2 million, were women.

The number of hired workers in 2013 was 6 million, or 69.4 percent of the total number of people employed in the economy. Compared with 2012, this was an increase of 136,000 people (2.3 percent). The number of self-employed among the total number of employed was 2.6 million or 30.6 percent. Of them, the share of productively employed people was 61.4 percent; unproductive employees made up 38.6 percent.

Currently, to collect data on employment and unemployment, most countries conduct sample surveys of the labour market, which measure the economic activity of the employed, unemployed and economically inactive persons in accordance with the criteria of the International Labour Organisation (ILO).

In Kazakhstan, employment surveys have been conducted quarterly since 2001 in all regions of the country. The surveys engage about 75,000 people aged 15 and older.

The methodology used by the agency to determine the main indicators of the labour market, including the number of self-employed and unemployed people, complies with guidelines for the use of key indicators of the labour market developed by the ILO. The methodological approaches used to classify a particular person as employed or unemployed are used in statistical practice in most countries, which allows them to obtain internationally comparable labour market indicators.

The population survey is carried out through employment questionnaires of the sample survey, compiled on the principle of a logical sequence of questions. Based on respondents’ answers, the economic activity of the population is classified as employed (wage workers or self-employed), unemployed or economically inactive, corresponding to the basic principles and guidelines of the United Nations regarding economic characteristics of populations and the International classification of employment status.

Who are self-employed? According to the International classification of employment status (ICSE 1993), employed workers are divided into wage (paid) workers and self-employed.

Wage workers are those who are working under a contract of employment (written or oral) providing for payment in the form of remuneration (salary). Self-employed people are divided into the following groups: employers, own-account workers, unpaid family workers and members of cooperatives.

Employers include persons engaged in entrepreneurial activity in any form of economic activity and using the hired labour of one or more employees on a continuous basis.

Independent workers are persons who carry out any kind of economic activity and do not hire permanent employees.

Unpaid family workers are employees of family firms that receive rewards not in the form of wages but on the basis of intra-profit distribution.

Members of a cooperative are persons who are members of a labour cooperative engaged in entrepreneurial activity.

In Kazakhstan, the sample survey of employment in the fourth quarter of 2013 showed that the number of self-employed was 2.6 million (30.3 percent of total employment), including 160,700 employers, 2.4 million self-employed, 32,200 workers in family businesses and 14,800 members of cooperatives.

Independent workers account for the lion’s share of self-employed (92 percent). Independent workers are those who work alone or with one or more partners, are engaged in activities on the basis of self-employment and do not hire permanent workers. About 63.3 percent of the self-employed work on an individual basis (registered or unregistered individual entrepreneurs); 36.7 percent are involved in production, both for their own consumption and for sale. According to the employment survey, in the fourth quarter of 2013, more than half (52.4 percent) of independent workers received income from the sale of products manufactured at their own business.

Most of the self-employed, 1.36 million or 52.5 percent, are involved in independent activity in agriculture, 674,900 or 26 percent in the retail sector and 599,100 or 21.5 percent in providing various public services, including transport, medical, educational or other services.

Results of the survey show that on average, one self-employed person works 35 hours a week, while in 2010 this was 31 hours. Only 0.4 percent of all self-employed people work five hours or less.

It should be noted that the share of self-employed of all employed people in developed countries is about 12-14 percent. For example, in France it is 11.0 percent; in Germany, 11.6 percent and in the U.K., 14.6 percent. In the Czech Republic it is 18.5 percent; in Italy, 25.1 percent; in Korea, 28.2 percent and Turkey, 37.1 percent.

In 2013, in accordance with the instructions of the head of state for the government in the programme article, “Social Modernisation of Kazakhstan: Twenty Steps to a Society of Universal Labour,” Kazakhstan’s National Statistics Agency, in cooperation with the Ministry of Labour and Social Protection, Ministry of Economy and Budget Planning, Ministry of Regional Development and Ministry of Agriculture, approved a new methodology to determine the number of self-employed, their monthly incomes and the unemployed population in the country.

The main aim is to assess the structure of the self-employed population and to determine the categories of persons to be engaged in productive employment, including through the mechanisms of the Employment Road Map 2020 programme, as well as to plan further steps for their formalisation and involvement in pension and social security schemes.

According to the new methodology, the self-employed population in Kazakhstan is divided into two groups: the productively employed and the unproductively employed.

The main criterion is the level of monthly income received from the production of goods, works and services. The level of monthly income is correlated with the subsistence level formed in each region of Kazakhstan.

In the fourth quarter of 2013, the share of productive employment in the total number of self-employed was 64.5 percent and the proportion of unproductive employees was 35.5 percent.

More information on this topic is available in the public domain on the National Statistics Agency website, http://www.stat.gov.kz.

The author is chairman of National Statistics Agency of Kazakhstan.

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