Central Asian Labour Market: Long Term Outlook

• The Central Asian labour market deserves to be discussed at length. In an age where ‘developed economies’ are suffering from increasingly ageing populations and decreasing birth rates, this region is paving its own path. The population of the Central Asian nations is growing rapidly, with ambitious young people set to transform their countries’ economies. 

• However, the stereotypes of a Central Asian migrant, especially to neighbouring countries, might prejudice analysts. It is important to look beyond that, and identify key recent trends with swift upskilling of populations and exciting emerging industries, creating opportunities for workers and investors alike.

Opening Up

• Open unemployment appeared for the first time after the collapse of the Soviet Union and upon the exit of the Central Asian nations from the bloc. The state no longer guaranteed a job. Due to inefficiencies in the company arrangements and the increased liberty of management, mass layoffs began. For example, 41,000 Kyrgyz workers ended up in short-time/forced leave arrangements by 2003 (IMF, 2006).

• Progressing into the late 1990s and early 2000s, a large section of the job market became informal: think bazaars and unregistered workshops. This constituted a ‘hidden unemployment’. At the same time, remittances and labour migration (see note on Tajikistan) became key pillars of the local economies: the IMF (2020) estimates that for Tajikistan and Kyrgyzstan labour remittances made up between 20% to 42% of GDP.

• Informal employment, to an extent, continues to plague the region. While only approximately 14% of the workers in Kazakhstan worked informally in 2021, this figure stood at 66.5% in Kyrgyzstan and 50% in Tajikistan (European Trading Federation, 2024). 

• However, now that consumers and businesses have adjusted to modern capitalism and the region has become more receptive to FDI inflows, what are the key developments that we should keep an eye on?

Demographic Trends

• In contrast to the ‘developed’ economies, young people in Central Asia are growing as a share of the population: the United Nations Population Fund (2024) estimates that Nearly a third of Central Asia’s population at present consists of young people (age 0–14), compared with 25% globally, 23% in Asia and 16 per cent in Europe.

• The UNFPA has also estimated that more than 20 million additional women and men in Central Asia will enter working age by 2050 (UNFPA, 2025). This represents a significant shift in the perception of women in the workplace and in the attitudes of the local governments; the economic growth potential is notable.

Sectoral Movement

• The agricultural sector’s contribution to GDP has been declining, signifying a structural movement towards secondary and tertiary industries. In Kazakhstan and Kyrgyzstan agriculture represents only about 5 % and 12 % shares of total GDP respectively. However, this trend is not entirely reflected in Tajikistan and Uzbekistan, where the sector remains a significant contributor to GDP, estimated at around 22% and 23% respectively (European Trading Federation, 2024). 

Notable Challenges and Risks

• Qualification level and higher education availability are issues: nearly 45% of employers in Uzbekistan report difficulties finding skilled workers, highlighting the gap between employers gearing up to compete internationally, and the labour force (Yahoo Finance, 2025). 

• In contrast, an interesting shift within the region is a potential hidden challenge: more and more workers from neighbouring countries are migrating to Kazakhstan, which is the undisputed economic leader in the region. However, the flow is not just from Central Asia: in Kazakhstan, the majority of migrant workers come from China, with 5,100 individuals, a 24.5% year-on-year increase (The Times of Central Asia, 2025). This is intensifying competition in an already contested labour market of Astana and Almaty, worsening the regional disparity. 

The Cordoba View

• The powerful demographic upside remains mispriced: Central Asia is one of the few regions with a rising youth share and expanding labour force. With over 20 million new workers by 2050, the region’s long-term growth capacity is structurally stronger than ageing Europe or East Asia, yet global narratives still anchor to outdated migration stereotypes.

• The labour market is quietly shifting: Informality remains high in Kyrgyzstan and Tajikistan, but Kazakhstan and Uzbekistan are seeing clear movement into higher-productivity sectors as FDI, services and industry deepen. This transition is slow, uneven, but real and consistently underestimated by external observers.