Skills for Employability in Uzbekistan Public Disclosure Authorized

The Skills Road Skills for Employability in Uzbekistan Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Mohamed Ihsan Ajwad, Ilhom Abdulloev, Robin Audy, Stefan Hut, Joost de Laat, Igor Kheyfets, Jennica Larrison, Zlatko Nikoloski, and Federico Torracchi Public Disclosure Authorized The Skills Road Skills for Employability in Uzbekistan Mohamed Ihsan Ajwad, Ilhom Abdulloev, Robin Audy, Stefan Hut, Joost de Laat, Igor Kheyfets, Jennica Larrison, Zlatko Nikoloski, and Federico Torracchi Standard Disclaimer: . This volume is a product of the staff of the International Bank for Reconstruction and Development/ The World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202-522-2422, e-mail [email protected]. Suggested citation: Ajwad, Mohamed Ihsan, Ilhom Abdulloev, Robin Audy, Stefan Hut, Joost de Laat, Igor Kheyfets, Jennica Larrison, Zlatko Nikoloski, and Federico Torracchi. 2014. “The Skills Road: Skills for Employability in Uzbekistan.” World Bank. Washington, DC. i Table of Contents List of Figures ..................................................................................................................................................................... iii Abbreviations and Acronyms ........................................................................................................................................... v Acknowledgements ............................................................................................................................................................ vi Overview .............................................................................................................................................................................. 1 1 Country Context .......................................................................................................................................................... 4 2 Labor Market Outcomes ............................................................................................................................................ 5 2.1 Job creation has kept pace with population growth .................................................................................................. 5 2.2 Jobs are distributed unevenly and labor market discouragement is high ................................................................... 7 2.3 The labor market has undergone significant transformations ................................................................................. 10 2.4 Job quality remains a significant concern for policy makers ................................................................................... 12 2.5 Labor market information systems are weak, hindering the job search and skills signaling process ........................ 15 3 The Demand for Skills.............................................................................................................................................. 17 3.1 Employers demand skilled workers, but have difficulty finding them ..................................................................... 18 3.2 Skills enhance employment outcomes, even when other factors are held constant ..................................................... 24 3.3 Higher skilled workers use their skills more often in the workplace ...................................................................... 29 4 Skill Formation over the Life Cycle ........................................................................................................................ 32 4.1 Skills are developed throughout the life cycle of an individual ................................................................................ 32 4.2 Access to general education is good, but preschool and tertiary school coverage is low .............................................. 33 4.3 The correlation between educational attainment and cognitive skills outcomes is weak, and there is significant variation within education levels ........................................................................................................................... 35 4.4 There is a weak correlation between educational attainment and non-cognitive skills ............................................. 37 5 The Skills Roadmap in Uzbekistan ......................................................................................................................... 39 5.1 Get children off to the right start by expanding access to quality early childhood development programs .................. 41 5.2 Ensure that all students learn by modernizing the curricula and improving teaching quality .................................. 41 5.3 Build job-relevant skills that employers demand by implementing selective active labor market programs ................ 42 5.4 Encourage entrepreneurship and innovation by increasing tertiary education access ................................................ 43 5.5 Match the supply of skills with employer demand by improving labor market information systems ......................... 44 References .......................................................................................................................................................................... 46 Appendix A: Questionnaire Sections ............................................................................................................................. 53 Appendix B: Constructing Cognitive Skills Scores Methods for Scale Development and Scoring .................... 54 Appendix C: Constructing Non-Cognitive Skills Scores Methods for Scale Development and Scoring ........... 62 Appendix D: Summary Tables ........................................................................................................................................ 70 Appendix E: Cognitive and Non-cognitive Skill Mean Scores .................................................................................. 78 ii List of Figures Figure 1: Uzbekistan’s GDP growth has been stronger than most ECA and OECD countries, 1996–2012 . 5 Figure 2: Productivity has grown considerably but continues to lag behind comparator countries, 2000– 2011 .................................................................................................................................................................. 6 Figure 3: Favorable demographics present a window of opportunity for increased economic growth in Uzbekistan, 2013 ............................................................................................................................................ 7 Figure 4: Male employment rates mirror those in OECD countries, but a much smaller share of women is employed in Uzbekistan compared to the OECD countries, 2013 ....................................................... 8 Figure 5: Labor market discouragement is high among young men and women, as well as older men, 2013 8 Figure 6: International migration rates are high among young men in Uzbekistan, 2013 .................................. 9 Figure 7: The share of agriculture in GDP has decreased, while the share of value added in services and industry has grown, 1995–2012 ................................................................................................................. 10 Figure 8: The services sector employs more than half of all workers in Uzbekistan, 2013 .............................. 11 Figure 9: State-owned enterprises dominate the labor market and employ roughly twice as many persons as the private sector, 2013 ............................................................................................................................... 11 Figure 10: Self-employment is dominated by micro-businesses in the services sector, 2013 ............................. 12 Figure 11: Informal salaried work is common in agriculture and industry jobs, as well as among lower educated individuals, 2013 .......................................................................................................................... 13 Figure 12: High shares of physical work and repetitive labor, 2013 ....................................................................... 14 Figure 13: Use of computers at work is relatively low in Uzbekistan,

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