Economic Returns to Skills in Kazakhstan in the context of international comparisons

Abstract

The study examines the economic returns to literacy, numeracy and problem-solving skills in adults in Kazakhstan with the OECD data. Unlike in other countries, the returns to skills are neither economically nor statistically significant. This finding, however, is fully driven by the public sector of the economy, while in the private sector the skills significantly improve one’s earnings. The returns to formal education accounting for skills are comparable in public and private sectors. This likely causes the outflow of most productive workers to the private sector and question the efficiency of the public sector of the economy in Kazakhstan.