Taking STEPs to Improve Employment Outcomes in Uzbekistan

February 2, 2015


A man repairs shoes near a market in Uzbekistan.

World Bank

  • Uzbekistan’s labor force is projected to increase by 3.9 million people by 2030, becoming the fifth largest labor force in emerging Europe and Central Asia.
  • A World Bank report provides policy goals and recommendations for improving skills in Uzbekistan, based on an assessment of both cognitive and non-cognitive skills.
  • The Skills Toward Employability and Productivity (STEP) framework brings together evidence-based and practical experience from a diverse set of areas to help inform the report’s five policy goals.

Uzbekistan has set itself an ambitious goal of becoming an upper middle-income country by 2030. To do so, policymakers recognize that creating good jobs and increasing productivity are crucial to this endeavor, which in turn can be achieved through a better skilled workforce.

People develop skills throughout all stages of their life – from conception to preschool, in primary and secondary school, in tertiary education, and on the job. Families, schools, and employers all impart valuable skills on individuals and help reinforce those skills during different stages of the life-cycle.

One of the fundamental challenges for individuals, however, is to ensure that the skills they acquire prepare them for the numerous hurdles they may face throughout the course of a lifetime. This is particularly true when it comes to securing gainful employment and ensuring career growth.

Linking education systems with the demands of the labor market and ensuring lifelong learning among skilled employees are ongoing challenges faced by nearly every country in the world.

In Uzbekistan, a team of experts from the World Bank Group partnered with experts from the German Agency for International Cooperation (GIZ) to take a new approach to addressing these particular challenges – going beyond the traditional data on educational attainment and instead disaggregating skills to include both cognitive and non-cognitive components.

The team’s latest report, The Skills Road: Skills for Employability in Uzbekistan, provides detailed recommendations for how these differentiated components of skill sets can be enhanced in order to improve the overall skills of potential employees and increase labor productivity in Uzbekistan.

Research shows that the skills being produced by the education system are not keeping pace with labor market demands. If current labor force participation rates hold, Uzbekistan’s labor force is projected to increase by 3.9 million people by 2030, becoming the fifth largest labor force in emerging Europe and Central Asia (after Russia, Turkey, Ukraine, and Poland). If tapped to its full potential, a young and growing population places Uzbekistan in an ideal position to reap the full benefits of economic growth.

Job quality remains a particular concern, with more than half of Uzbekistan’s workers employed in the informal sector. Too many of these workers in the informal sector carry out routine tasks and therefore, do not learn new skills on the job. Firms in the formal sector that are looking to hire skilled employees complain of significant difficulties finding skilled workers: one study found that 73 percent of firms identified inadequate skills as an obstacle to doing business.

As part of the country’s continuing efforts to take advantage of its young and growing population and make better use of its human capital, policymakers in Uzbekistan are working with the World Bank Group to understand the individual skills needed to bring about better labor market outcomes and also design policies and programs designed to improve the skills made available to labor market participants.

This latest report helps illuminate the critical role that skills play in labor markets and provides in-depth analyses on ways these skills can be enhanced. The report examines how actions targeting both cognitive skills - such as literacy, numeracy, and memory - and non-cognitive skills - such as extraversion, conscientiousness, openness to experience, agreeability, and emotional stability – can improve employment outcomes.

“Skills is a broad term,” notes Mohamed Ihsan Ajwad, World Bank Group Senior Economist and co-author of the study – which also covers Tajikistan and the Kyrgyz Republic.

“What we tried to do in this report is differentiate the impact of cognitive and non-cognitive skills on employment outcomes. These were the first large-scale jobs and skills surveys administered in the country, so we were then able to make recommendations that go beyond other works that primarily focus only on education attainment,” says Ajwad.

The report presents five key policy goals to improve the skills of the current and future workforces in Uzbekistan. These goals are informed by the Skills Toward Employability and Productivity (STEP) framework, which brings together research-based evidence and practical experience from a diverse set of areas.

The first of the five goals focuses on getting children off to the right start by expanding access to quality early childhood development programs, where rates of return to investment are generally very high and important soft skills are learned. The second goal looks to ensure that modern curricula are in place for students in Uzbekistan and that improvements in teaching quality are achieved. Complementing these education reforms, the report looks at implementing selective labor market programs that can boost participation among discouraged workers and women, as well as incentives for firms to provide more on-the-job training to workers.

The fourth goal cited in the report is designed to encourage entrepreneurship and innovation by increasing access to quality tertiary education, while the fifth goal focuses on matching the supply of skills with employers’ demands by improving labor market information systems.

Collectively, these goals are designed to help individuals develop and hone skills, not just during their education, but throughout their entire lives – from childhood to retirement. In doing so, Uzbekistan can achieve its objective of creating good jobs and increasing worker productivity, and thereby, take steps toward achieving its goal of upper-middle income status by 2030.