Pension burdens and labor force participation in Kazakstan

Abstract

This paper examines the pressures imposed by the vast pension system in the former Soviet republic of Kazakstan. Today, some 17% of the country receives pension payments, one of the highest rates in the world — despite the fact that Kazakstan is only now completing its demographic transition. Using a pooled regional-time series data set from pre- and post-Soviet eras, the paper also examines determinants of pension populations and the labor force participation rate. It finds that Kazakstanis in the post-Soviet era respond to price incentives both with respect to real pensions and real wage rates — in stark contrast to dramatically backward-bending labor supply curves of the Soviet era.