Regional and sectoral wage disparities as a reflection of inequality: The case of Kazakhstan

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In today’s world, many countries, including Kazakhstan, are facing growing income inequality, poverty, and an increasing polarization of society. These challenges threaten social stability and make it difficult to achieve the Sustainable Development Goals. The purpose of this study is to investigate the size and trends of regional and sectoral wage disparities in Kazakhstan, as well as to create a typology based on the average wage levels in different regions and to provide recommendations for reducing income inequality. The study tested hypotheses about the relationship between the average nominal wage and the level of GRP, level of education, industry specialization, type of ownership, and size of enterprises. The methods of expert survey, correlation, and cluster analysis were used. The study revealed the tendency of increasing inequality of labor income. The largest differences between wages in extractive industries and agriculture were revealed in the Atyrau (11.5) and Mangystau (9.2) regions and Astana (7.2). Differences in average wages between regions were estimated at 1.7 to 7.8 times. The most significant factors affecting the level of average wages are gross regional product per capita and the share of gross value added of the quasi-public sector in the gross regional product. In order to reduce differences in wages, it is recommended to introduce progressive taxation, apply regional increasing coefficients, and calculate the minimum wage based on the hourly wage rate.

Acknowledgment
This work is supported by the Committee of Science Ministry of Science and Higher Education of the Republic of Kazakhstan (Grant BR21882165).

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    • Figure 1. Dynamics of labor share in GDP and regional differences by GRP per capita and average nominal wages
    • Figure 2. Ratio of median and modal wage to the average wage in Kazakhstan, %
    • Figure 3. Distribution of population by the size of average per capita monetary income
    • Figure 4. External migration of the population over 15 years of age by level of education
    • Figure 5. Dendrogram with the use of the intergroup linkage method
    • Table 1. Information on interviewed experts
    • Table 2. List of indicators
    • Table 3. Correlation matrices of the dependence of the average nominal wage on factors in the regional aspect
    • Table 4. Correlation matrices of the dependence of average nominal wages on factors in the industry aspect
    • Table 5. Cluster typology of regions in Kazakhstan
    • Table 6. Hypothesis testing results
    • Table A1. Regional and sectoral disparities s of the average monthly nominal wage in Kazakhstan, USD
    • Conceptualization
      Aizhan Tleuberdinova, Nailya Nurlanova, Farida Alzhanova
    • Data curation
      Aizhan Tleuberdinova, Gulnara Andreyeva
    • Investigation
      Aizhan Tleuberdinova, Nailya Nurlanova, Farida Alzhanova
    • Methodology
      Aizhan Tleuberdinova, Nailya Nurlanova, Farida Alzhanova
    • Project administration
      Aizhan Tleuberdinova, Nailya Nurlanova
    • Software
      Aizhan Tleuberdinova, Gulnara Andreyeva
    • Supervision
      Aizhan Tleuberdinova, Farida Alzhanova
    • Visualization
      Aizhan Tleuberdinova, Gulnara Andreyeva, Farida Alzhanova
    • Writing – original draft
      Aizhan Tleuberdinova, Nailya Nurlanova, Gulnara Andreyeva
    • Formal Analysis
      Nailya Nurlanova, Gulnara Andreyeva
    • Validation
      Nailya Nurlanova, Farida Alzhanova
    • Writing – review & editing
      Nailya Nurlanova, Farida Alzhanova
    • Funding acquisition
      Farida Alzhanova
    • Resources
      Farida Alzhanova