Kazakhstan Admits Shadow Workforce Far Larger Than Official Totals

Kazakhstan’s labor authorities told lawmakers this week that the number of people working outside formal channels is far greater than published figures suggest, raising fresh concerns about pension funding and tax revenue. Labor and Social Protection Minister Askarbek Yertaev told senators that ministry estimates indicate the informal workforce may be close to three times the size reflected in statistical reports.

The ministry laid out its assessment during a session on regional development, noting that out of a total labor pool of 9.7 million, only 6.7 million people made pension payments at least once in 2025. Of those contributors, about 5.3 million were classed as employees and 1.4 million as self-employed, leaving roughly 3 million people with no recorded pension contributions — nearly one in three workers, by the ministry’s count. By contrast, the National Statistics Bureau last year put informal employment at about one in eight of the employed population, or just over 1.1 million people, underscoring a large and growing gap between survey-based statistics and administrative evidence.

That gap becomes sharper when officials compare different government databases. While statistical reports list about 7.1 million registered employees, the national employment-contract registry contains contracts for only about 4.1 million people — a shortfall that suggests many labor relationships are not being captured in formal records. Yertaev pointed to financial pressures on households, including unpaid debts and frozen accounts, as factors that push workers toward undeclared pay and off-the-books arrangements.

To shrink the hidden economy, the ministry said it will lean harder on digital solutions built into its online labor portal, rolling out an automated matching tool meant to link jobseekers with vacancies based on education and work history and to guide users through hiring procedures. A labor economist contacted for this article, Dr. Aigul Saparova of Almaty University, cautioned that technology can speed up formalization but won’t be sufficient on its own. "Automated tools help, but people need incentives and clearer safeguards — otherwise many will stay undocumented to protect cash flow," she said.

Revenue officials also reported progress on bringing platform workers into the tax net. A pilot project with the Labor Ministry registered more than 43,000 taxi drivers as individual entrepreneurs under a simplified tax regime, and the State Revenue Committee has linked its systems with 31 online platforms to better track gig income. Lawmakers at the Senate meeting urged a two-pronged approach: stepped-up enforcement in some sectors combined with measures that encourage voluntary registration, such as sectoral wage agreements and requirements for companies to disclose their employment makeup.

Officials framed the new estimates as a wake-up call for policymakers who must balance revenue collection with worker protections. If a substantial share of the workforce remains outside formal channels, pension liabilities and government services could be undermined, industry analysts warn, making a coordinated mix of administrative reform, targeted incentives and oversight central to any realistic effort to close the gap.