Kazakhstan’s Labor Market in the Era of Digital Transformation: Structural Shifts and Institutional Challenges

This study examines the structural transformation of Kazakhstan’s labor market in the context of accelerated digitalization and post-pandemic recovery. Situated within the broader discourse on labor adaptability in emerging economies, this study addresses how digital and institutional shifts are reshaping employment patterns, sectoral composition, and workforce dynamics. Using panel data analysis, regression models, and cluster techniques, this study evaluates the impact of digital infrastructure, sectoral specialization, educational investment, and demographic trends on labor productivity, formal employment, and unemployment. Empirical findings highlight a growing divergence between regions, with digitally advanced urban centers outperforming agrarian and resource-dependent areas in employment growth and labor efficiency. The study results also reveal that youth unemployment and the segment of young people Not in Employment, Education, or Training (NEET) remain structurally embedded challenges, characterized by significant gender-based and regional disparities. Furthermore, the informal sector persists as an adaptive buffer, especially during periods of economic uncertainty, but continues to limit social protection coverage. This study concludes that Kazakhstan’s labor market is undergoing a transition from an industrial resource model to a service- and knowledge-based configuration. Effective policy responses should focus on enhancing digital inclusion, promoting flexible employment models, and targeting youth labor integration. These insights provide a basis for designing regionally differentiated labor strategies aligned with long-term economic modernization.