The great indoors

How important is outdoor work to Kazakhstan?


The government of Kazakhstan is disgruntled about the economy, which doubles the average resident’s income every seven years or so. It has launched a program of “forced” innovation and industrialization (“accelerated” may be a more accurate translation) in order to diversify away from production of oil, gas and other raw materials.

Less publicized is the fact that the economy is already diversifying. Like higher-income economies, it produces more services than goods. Oil and gas still dominate exporting but only because of their high prices.

One gauge of the economy’s maturation is the declining importance to it of outdoor work. A modern economy emphasizes brains, not brawn. Where the latter matters, the season’s weather may affect sharply the number of workers.

In Kazakhstan, weather effects on employment are mild for a transition economy. For 2011, the number of workers and job-seekers – i.e., the labor force -- varied between 8.6 million and 9 million, depending on the season: Lowest in the winter and highest in the fall. But the largest monthly workforce (October) is only 367,000 more than the smallest (January and February), just 4.2% of the mean size for the year. Employment too was steady across the months. In 2010, seasonal effects on the labor force and on just the employed were even smaller than in 2011.


The match game


Similarly, the monthly unemployment rate in 2011 steadied between 5.3% and 5.6%, varying by only a twentieth of the mean annual rate. Unemployment is highest in the winter but probably not by enough (18,000 jobless workers more than in the best month) to justify special benefits for those out of work because of the season. Overall, the seasonal effect on unemployment in 2011 was less than half that of 2010; and the average unemployment rate (for January through November) dropped from 5.8% to 5.4%. Thus the labor market may be improving its matches of the jobless to jobs, although it isn’t clear whether the improvement is due to a strengthening economy or to better information for job hunters.

From only two years of data, we cannot conclude that seasonal employment in Kazakhstan is becoming moot. Some seasonal effects were larger in 2011 than in 2010. But estimates using quarterly data for 2003 through 2008 confirm that seasonality effects have been waning steadily over the long run in Kazakhstan. They raise the possibility that the government’s industrial policy addresses a problem that entrepreneurs already are solving. – Leon Taylor, tayloralmaty@gmail.com


Notes


1. All data are from Kazakhstan’s agency on statistics (www.stat.kz) unless otherwise noted. Quarterly estimates may be more accurate than monthly ones, since the government has actually surveyed the labor market each quarter.

2. I measure the seasonal effect on the labor force as the ratio of the difference between the largest monthly size of the force and the smallest number, relative to the mean size for the year. For example, in 2010, the labor force was smallest in January (8,448,400 members) and largest in June (8,667,900). The variation was thus 8,667,900 minus 8,448,400, or 219,500. The mean size of the labor force over 2010 was 8,611,200. As defined here, the “seasonal effect” was 219,500 divided by 8,611,200, or 2.5%. Seasonal effects for the "employed population" (which includes the self-employed as well as employees) and for the unemployment rate are measured similarly.

We may measure seasonal effects in other ways, such as the ratio of the standard error to the mean. The measure that I use here puts more weight on extreme seasonal effects.

Seasonal effects do not always arise from weather.  Holiday spending may also affect employment. But it is probably safe to say that, in Kazakhstan, weather affects significantly the seasonal effects as measured here, even if it is not the only determinant.

My estimates of seasonal effects in 2003 through 2008 are:

For the labor force: 2003, .082; 2004, .032; 2005, .026; 2006, .019; 2007, .022; 2008, .015.

For employees and the self-employed: 2003, .098; 2004, .042; 2005, .034; 2006, .026; 2007, .029; 2008, .021.

For the unemployed: 2003, .086; 2004, .078; 2005, .063; 2006, .073; 2007, .067; 2008, .060.

For the unemployment rate: 2003, .17; 2004, .107; 2005, .086; 2006, .092; 2007, .094; 2008, .075.