Sometimes, winners lose: Economic disparity and indigenization in Kazakhstan

Abstract

Several post-Soviet states have introduced indigenization policies to improve the relative economic, political or social position of formerly disadvantaged populations. Using one example of such policies – “Kazakhization” in Kazakhstan – we investigate their impact on the comparative earnings of two directly affected groups, ethnic Kazakhs and ethnic Russians. Oaxaca decompositions show that Kazakhs are better endowed with income generating characteristics but receive lower returns to these characteristics than Russians. The second effect dominates and Kazakhs have comparatively lower average living standards. While “Kazakhization” may have been successful in some sense it appears to also have induced ethnic Russians to move into jobs that (at least in monetary terms) are superior now to those held by Kazakhs.