1.

Labor force

In any civilized society, economic reforms carried out a priori for a person to
improve their welfare. For this reason, the modern concept of socio-economic
development of the isolated sphere of labor force associated with the regulation of
incomes, and the part which is connected with work (i.e. salaries, wages), thus
emphasizing the importance of this source of income .
The shift to a market economy brings radical changes in the regulation of income:
primarily the weakening of the state role and autonomy of regions and enterprises
(companies) in this region, increasing the importance of market regulators.

In economics, the people in the labour force (or labor force) are the suppliers of
labor. The labor force is all the nonmilitary people who are officially employed or
unemployed. In 2005, the worldwide labor force was over 3 billion people.

Normally, the labor force of a country (or other geographic entity) consists of
everyone of working age (typically above a certain age (around 14 to 16) and below
retirement (around 65) who are participating workers, that is people actively
employed or seeking employment. People not counted include students, retired
people, stay-at-home parents, people in prisons or similar institutions, people
employed in jobs or professions with unreported income, as well as discouraged
workers who cannot find work. In the United States, the labor force is defined as
people 16 years old or older who are employed or looking for work. Child labor laws
in the United States forbid employing people under 18 in hazardous jobs.

In the United States, the unemployment rate is estimated by a household survey

called the Current Population Survey, conducted monthly by the Federal Bureau of
Labor Statistics. The unemployment rate is calculated by dividing the number of
unemployed persons by the size of the workforce. An unemployed person is defined
as a person not employed but actively seeking work. The size of the workforce is
defined as those employed plus those unemployed.

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 2. Labor economics.
Labor economics seeks to understand the functioning and dynamics of the market
for labor. Labor markets function through the interaction of workers and employers.
Labor economics looks at the suppliers of labor services (workers), the demanders of
labor services (employers), and attempts to understand the resulting pattern of wages,
employment, unemployment and income.
Wages.
A wage is compensation, usually financial, received by workers in exchange for
their labor.
Compensation in terms of wages is given to workers and compensation in terms
of salary is given to employees. Compensation is a monetary benefit given to
employees in return for the services provided by them.
Employment.
Employment is a contract between two parties, one being the employer and the
other being the employee. An employer may be defined as: a person or institution that
hires employees or workers. Employee is contributes labor and expertise to an
Endeavour. Employees perform the discrete activity of economic production. Of the
three factors of production, employees usually provide the labor.
Unemployment.
Unemployment as defined by the International Labour Organization occurs when
people are without jobs and they have actively looked for work within the past four
weeks. The unemployment rate is a measure of the prevalence of unemployment and
it is calculated as a percentage by dividing the number of unemployed individuals by
all individuals currently in the labour force.
Income.
Income is the consumption and savings opportunity gained by an entity within a
specified time frame, which is generally expressed in monetary terms. However, for
households and individuals, "income is the sum of all the wages, salaries, profits,
interests payments, rents and other forms of earnings received... in a given period of
time." For firms, income generally refers to net-profit: what remains of revenue after
expenses have been subtracted. In the field of public economics, it may refer to the
accumulation of both monetary and non-monetary consumption ability, the former
being used as a proxy for total income.

3. Labor force in Kazakhstan

Working conditions

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Retirement age is 61 years, and legal weekly duration is 40 hours. The labour
contract is governed by legal provisions and to a lesser extent by collective
agreements and individual negotiation. The formalism of labor contract is very rigid.
The procedures for layoff and hiring are rather flexible.
Cost of labor
Average wage monthly in Kazakhstan is KZT 63,570 (USD 417). But, minimum
wage is 9,752 tengue (80.40 USD) in 2007. This amount does not facilitate a
comfortable living in Kazakhstan.
Social contributions
Social security contributions paid by employers is 31.5%. Social security
contributions paid by employees means that every employee should pay 10% of his
salary to pension fund whose present withdrawals benefit them and they should also
contribute for their own withdrawal.
Social partners
Social dialogue and involvement of social partners - the employees are protected
against any anti union discrimination by the law. But violations to this law have taken
place (union members have been dismissed and threatened). Big enterprises have also
created conditions so that creation of a union and collective negotiations are rendered
impossible. The law guarantees the right to strike but its application is legally highly
controlled. The government has drawn a list of strategic industries and companies in
which strike is authorised according to certain conditions. Generally, the employees
can only go on strike if a dispute has not been resolved through existing arbitration
channels. The employees should necessarily give the employers an advance notice of
15 days for the strike.

Labor market situation in the Republic of Kazakhstan

In the II quarter of 2010 the economically active population at the age of 15

and older amounted to 8,6 million, 1,78% more than in the corresponding period the
previous year. The economy of the republic were employed 8,1 million persons, or
67,1% of the population at the age of 15 and older. Their number is compared with
the second quarter of last year increased by 219,9 thousand persons (2,8%).
Main indicators of labour market in Kazakhstan in 2 quarter of 2008-2010
Population at the age of 15 and older
II quarter
I quarter
2008 2009 2010 of 2010

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 Economically active population, thsd persons 8425,6 8464,8 8620,4 8555,5

Rate of economically active population, % 71,2 70,8 71,2 70,7

Employed population, thsd.persons 7868,4 7896,6 8116,5 8029,3

Employment rate, % to:

Population at the age of 15 and older 66,5 66,0 67,1 66,4

Economically active population 93,4 93,3 94,2 93,8

Employees, thsd.persons 5186,0 5209,7 5383,3 5348,7

percentage in number of employed population, % 65,9 66,0 66,3 66,6

Self-employed population, thsd.persons 2682,4 2686,9 2733,2 2680,6

percentage in number of employed population, % 34,1 34,0 33,7 33,4

Unemployed population, thsd. persons 557,2 568,1 503,9 526,2

Unemployment rate, % 6,6 6,7 5,8 6,2

Unemployed at the age of 15-24, thsd.persons 97,5 94,6 68,2 81,5

Unemployment rate among youths, % (at the age of 15-

24) 7,4 7,2 5,2 6,1

Long-term unemployment rate, % 2,7 2,6 2,2 2,3

Economically non-active population, thsd persons 3401,9 3497,6 3478,7 3544,1

Rate of economically non-active population, % 28,8 29,2 28,8 29,3

Share of employees in total number of employed was 66,3%, self-employed –

33,7%. Most of the employees were employed in the public and private organizations
- 81,2% (4,4 mln. persons).
In the II quarter of 2010 number of unemployed (persons at the age of 15 and
older, who were not in employment, actively seeking work; currently available for
work) was 503,9 thousands persons and decreased compared to the same period last
year to 64,2 thousand persons or 11,3%. Unemployment rate was 5,8% (in the II
quarter of 2009 - 6,7%).
In the II quarter of 2010 percentage of unemployed males was 43,8%, females
– 56,2%.
Number of unemployed females was 283,3 thsd. persons and increased up in contrast
with males to 62,6 thsd. persons (to 28,4%).

Unemployment rates for 2008-2010

in percent

5
 9 8,1
7,4 7,7
8 7,0 7,1 7,2
7 6,3 6,3 6,2
5,8
6 6,9 6,6 6,9 6,7
6,4 6,6
5 5,9 6,0 6,1
5,2
4
2,9 2,7 2,6 2,7 2,7 2,6
3 2,5 2,3 2,3 2,2
2
1
0
I quarter II quarter III quarter IV quarter I quarter II quarter III quarter IV quarter I quarter II quarter

2008 2009 2010

Unemployment rate Unemployment rate among youths Long-term unemployment rate

In the II quarter of 2010 percentage of youth (at the age of 15-24 years) in total
number of unemployed was 13,5%, or 68,2 thsd. persons. Unemployment rate among
youths was 5,2% (in rhe II quarter of 2009 – 7,2%).
Unemployed population by sex and age in II quarter of 2010
Total in which
males females
unemploy
thsd. unemploy unemploy
ment rate, thsd. thsd.
persons ment rate, ment rate,
% persons persons
% %
Unemployed, total 503,9 5,8 220,6 5,0 283,3 6,7

in which at the age of

(years)
15-24 68,2 5,2 34,1 4,9 34,1 5,6

25-29 103,1 7,9 48,9 7,0 54,2 9,0

30-34 74,2 5,8 31,8 4,8 42,4 6,7

35-39 54,4 5,9 22,5 5,0 31,9 6,9

40-44 49,3 4,9 20,7 4,3 28,6 5,6

45-49 57,7 5,4 23,2 4,5 34,5 6,2

50-54 49,6 5,3 17,2 3,8 32,4 6,8

55-59 37,0 6,7 15,0 5,8 22,0 7,6

60-64 10,4 5,4 7,2 5,6 3,2 4,9

Among employed persons are predominated persons with upper secondary

education was 35,9% (181,0 thsd. persons) and secondary vocational (special)
education was 25,5% (128,5 thsd. persons). Specific weight of persons, who have
higher education, was 23,9% in total number of unemployed (120,6 thsd. persons).
Number of persons, registered as unemployed (datum of Ministry of work and
social protection of population of the Republic of Kazakhstan) at the end of June of
2010 year was 69,5 thsd. persons, it decreased in contrast with corresponding period

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of 2009 year to 23,2 thsd. persons or to 25,1%. Percentage of registered
unemploymed in number of economically active population was 0,8% (in June of
2009 year was 1,1%).

Summary and conclusions.

Shortly

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 Methodological explanations

Basis for information receipt about labour market is data sampling surveys of
population employment. Sample surveys are conducted since 2001 year quarterly.
The survey is conducted in all regions of republic. Supervising units are households
and persons at the age of 15 years and older, without determination of low age limit.
At publication of data survey are used concepts and definitions, based on
standards and methodological recommendations of international labour organization.
Economically active population (labour force) is a part of population at the
age determined for measurement of economic activity of the population providing

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supply of the labour force for production of goods and services. Economically active
population comprises persons employed in all economic activities as well as
unemployed.
Population at giving age covers persons at the age of 16 and males at the age
of 63, females at the age of 58.
Rate of economically active population is a percentage of economically
active population in the total population size at the age of 15 and older.
Employed (working) population – all persons at the relevant age, who by
their status within a certain short period equal to one week may be classified into one
of the following categories:
a) employees;
b) Self-employed workers.
Employed population comprises persons who performed work in surveyed
week (at least one hour per week) on hire for remuneration, and also bringing income
from self-employment. In number of employed population are included persons, who
temporarily were absent at work, but had formal attachment (illness, maternity leave,
on baby minding, annual labor or educational holidays and other).
Employment rate is a percentage of employed in the economy in total number
of population at the age of 15 and older.
Main work (main profitable employment) is work, which this person
considers for himself with paramount.
Other work, which this person had during the surveyed period, is additional
work (employment), allowing to receive complementary income.
Employees (paid workers) are persons working under the hire contract for
payment (remuneration) in form of wages and salaries, premiums, additions etc. or in
kind.
Self-employment is an activity, in which the size of remuneration directly
depends on income received from production and sales of goods and services (when
own consumption is considered as a part of income).
In accordance with the International Classification of Occupations
(employment status) determined are the following groups of self-employed persons:
employers are persons who manage their own enterprise or are engaged in
independent entrepreneurship in any economic activity and have one or more
employees.
own–account workers comprise persons who, while working independently
or with one or more partners, are engaged in self-employment and do not hire other
workers on a constant basis.
unpaid family workers are persons who, as a rule, work without remuneration
at the enterprise farm which is managed by their relative person.
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 members of producers’ cooperative include persons who are members of
labour cooperative which is engaged in entrepreneur activity.
The unemployed are persons at the age specified for measurement of the
economic activity of population who during the reference period were:
a) without work (were not in employment);
b) actively seeking work;
c) currently available for work during a certain period.
The schoolchildren, students, pensioners and invalids are considered as
unemployed, provided they were searching for job and were ready to start it.
Unemployment rate is a percentage of unemployed in total number of
economically active population.
Unemployment rate among youths – percentage of unemployed people at the
age of 15-24 years in the economically active population, in percent.
Long-term unemployment rate - percentage of unemployed people being
jobless for 1 year and more in the economically active population, in percent.
Rate of unemployment among population of certain age group is a
percentage of unempoyed people in the economically active population of
appropriate age group, in percent.
Rate of unemployment by economic activities is a percentage of unemployed
of certain group of economic activities in number of economically active population
of appropriate group of economic activiies, in percent.
Economically non-active (passive) population include persons at the age
determined for measurement of economic activity of the population who are not
employed or unemployed during the reference period.
Rate of economically non-active (passive) population is a percentage of
economically non-active population in the total population size at the age of 15 and
older.
Classification of economic activities is resulted in accordance with General
qualifier of kinds of economic activity, authentic European qualifier of kinds of
economic activity (NACE); employments - according to State qualifier of
employments. Groupings of employments are comparable with International standard
classification of employments (ISCE-ISKO-88).
Working time - time, in current of which worker executes job descriptions in
accordance with certificates of employer and conditions of individual labour contract.
Normal duration of workweek is hours, established with legislation, rules,
collective agreements for concrete kind of works and categories of workers.
Normal duration of workweek should not exceed time 40 hours per week.
For separate categories of workers reduced duration of working time establishes (Law
of the Repubic of Kazakhstan "About labour in Kazakhstan").
Actual duration of workweek is actually fulfilled time.
Actually fulfilled time includes: working time throughout normal uptime, time
fulfilled over normal duration of uptime, time for service and tooling, time of idle
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time on work station not on fault of worker, time of short breaks in work for rest.
Actually fulfilled time doesn’t inclued annual labor holiday or time of illness.
At publication of data survey are used concepts and definitions, based on
standards and methodological recommendations of international labour organization.
Wage – labor remuneration depending on the qualification of the worker,
complexity, quantity, quality and conditions of the work fulfilled, and compensation
and motivation payments.
Monthly average nominal wage of one worker is defined by dividing the
amount of the wage fund charged by the actual number of workers and number of
months in the reporting period.
Index of nominal wage – a relative ratio describing the change of the wage for
the reporting period against the base period.
Index of real wage - a relative ratio describing the change of nominal wage
with the view of the change in the reporting period against the base period.
Is computed by dividing the index of average monthly nominal wages and
salaries by consumer price index for goods and services. Both indexes should refer to
one and the same time period.
Minimum monthly wage – a guaranteed minimum of money payments of the
worker of simple unqualified (least hard) labor upon his/her fulfillment of labor
norms (labor duties) in normal conditions and during normal working hours as are set
in this code, per month.
Wage fund – total money of the organization charged for remuneration of
workers in money and in-kind form (official salary (base wage rates), additional
payments, rise in wages, premium and other motivation and compensation payments),
with the view of taxes and other deductions (income tax, obligatory pension
contributions) in line with the legislation of the Republic of Kazakhstan and
irrespective of their finding sources and period of actual payments.
Wage (paid) workers – people working under contrast of engagement
stipulating the payment (remuneration) as salary, premium, rise in wages and etc., or
in in-kind form.
Workers on payroll – number of people hired under individual labor
contrasts, irrespective of conclusion period, expect for the people working under civil
agreements.
Personnel of main activity - number of workers, occupied directly on
manufacture of basic (goods or services) and by-products, inevitably received
alongside with basic, that can be realized other organizations.
Cost of labour force (charges on content of labour force) – total of expenses
employer, connected with content and employment of labour force.

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 Classification of economic activities is resulted in accordance with General
qualifier of kinds of economic activity (ОКЭД - 2), authentic European qualifier of
kinds of economic activity (NACE); employments - according to State qualifier of
employments. Groupings of employments are comparable with International standard
classification of employments (ISKO-88).

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