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EURASIAN JOURNAL OF
ENTREPRENEURSHIP AND PEDAGOGY
www.in-academy.uz
Volume 3, Issue 2, April 2025
SJIF: 5.061
’KEY CHALLENGES OF EMPLOYMENT IN UZBEKISTAN AND
THEIR SOLUTIONS’’
Mamadaliyeva Muattarxon
Andijan State University
Student of the Faculty of Socio-Economics
ARTICLE INFO
ABSTRACT
Qabul qilindi: 29-mart 2025 yil
Ma’qullandi: 10-aprel 2025yil
Nashr qilindi:15-aprel 2025 yil
This article examines the issues of ensuring employment
and reducing the unemployment rate in Uzbekistan’s
economy by creating new jobs. This problem is of not only
economic but also social significance, playing an
important role in improving the well-being of the
population and ensuring the sustainable development of
the state. The article highlights the impact of
technological development on employment and issues
related to the informal labor market. It analyzes
measures to address the unemployment problem,
employment and unemployment indicators in the
Republic of Uzbekistan, as well as the distribution of
employed individuals across formal and informal sectors
KEYWORDS
Employment
issues,
unemployment, informal labor
market, youth employment, job
creation and economic reforms,
technological
development,
seasonal unemployment, full
employment, labor contract,
labor resources.
In our country, numerous reforms are implemented annually to ensure employment for the
population. Additionally, issues related to job placement in vacant and quota-based positions
are being addressed, and various methods of self-employment are being introduced. Although
large-scale reforms have been carried out in recent years to increase employment and reduce
the unemployment rate, the labor market continues to face pressing challenges. In particular,
youth unemployment, limited job opportunities in rural areas, and the prevalence of the
informal labor market negatively impact the country’s socio-economic development.
In his Address to the Oliy Majlis, the President of the Republic of Uzbekistan, Sh. Mirziyoyev,
emphasized “the implementation of a qualification certification system for in-demand
occupations starting from January 1, 2021.” Additionally, during the Youth Forum, a decision
was made “to allocate $100 million to support youth entrepreneurship and employment.
Furthermore, it was highlighted that 1 trillion UZS and $50 million would be allocated to
finance youth business projects through credit schemes and to provide vocational training.”
This, in turn, signifies that during the era of innovative development, extensive opportunities
are being created for young people. As a result of such initiatives, partial unemployment is
expected to decrease, and youth employment will be enhanced. The ongoing reforms are
aimed at fostering individuals’ comprehensive development and independent professional
growth. A gradual reduction in unemployment and an increase in employment can only be
achieved if trust in entrepreneurship and the private sector continues to grow within the
country.
DISCUSSION AND RESULTS
Labor economics studies various aspects of the labor market, labor resources, employment,
labor relations, wage systems and employee income, labor productivity and efficiency, labor
standardization, and personnel management methods.
1
Address of the President of the Republic of the Oliy Majlis, 29.12.2020.
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Volume 3, Issue 2, April 2025
SJIF: 5.061
Employment refers to the engagement of the able-bodied population in socially beneficial
labor activities that are not contrary to the law and provide labor income while fulfilling both
personal and social needs. Employment also represents interpersonal relations regarding the
integration of workers into a specific labor cooperation system based on the social division of
labor.
According to the official data of the Ministry of Employment and Labor Relations of the
Republic of Uzbekistan, as of today, 13.7 million people are employed in the Uzbek labor
market. Among them, 5.8 million are engaged in the formal sector, while 7.9 million work in
the informal sector, including 2.6 million individuals employed as labor migrants.
Categories of Employment in the Formal Sector of the Economy:
Employees of government administration bodies;
Workers in the education and healthcare sectors;
Employees of law enforcement agencies;
Personnel in the defense sector;
Employees of state-owned enterprises and organizations;
Workers in the social sector and regulatory agencies.
Categories of Employment in the Informal Labor Sector:
Agricultural workers;
Employees in the construction sector;
Representatives of the service sector;
Small business owners and artisans;
Participants in labor migration;
Individuals engaged in unregistered trade and commercial activities.
The insufficient availability of formal job opportunities and the lack of necessary
qualifications to enter the labor market are the primary factors compelling individuals
to seek employment in the informal sector. Workers engaged in this sector often lack
social protection and labor rights guarantees, making them vulnerable to economic
instability.
According to Table 1, between 2017 and 2019, the proportion of individuals employed in the
formal sector decreased by 8.5%, while employment in the informal sector declined by 5.2%.
In 2019, the highest share of formal employment was recorded in Tashkent city (81%), Navoi
region (67%), and Tashkent region (47.4%). Conversely, the highest levels of informal
employment were observed in Namangan (68.1%), Surkhandarya (67.8%), and Samarkand
(66.8%) regions.
These trends highlight the need for a comprehensive analysis of structural changes in the
labor market, regional employment levels, and the effectiveness of ongoing reforms aimed at
expanding formal job opportunities.
Distribution of Employment by Formal and Informal Sectors Across Regions
2017
2019
Regions
Formal
Informal
Formal
Informal
2
“Employment”, Wikipedia,
https://uz.wikipedia.org/wiki/bandlik
(30.04.2025)
3
Official data of the Ministry of Employment and Labor Relations of the Republic of Uzbekistan. 2022.
4
Official data (2017-2019) from the State Committee of the Republic of Uzbekistan on the regional distribution of
employment by formal and informal sectors.
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Volume 3, Issue 2, April 2025
SJIF: 5.061
Andijan
31,2
68,8
36,3
63,7
Bukhara
41,3
58,7
46,9
53,1
Jizzakh
37,5
62,5
37,6
62,4
Kashkadarya
38,9
61,1
35,6
64,4
Navoi
56,5
43,5
67,0
33,0
Namangan
29,7
70,3
31,9
68,1
Samarkand
32,2
67,8
33,2
66,8
Surkhandarya
32,2
67,8
32,2
67,8
Sirdarya
45,4
54,6
46,8
53,2
Tashkent
38,8
61,2
47,4
52,6
Fergana
34,4
65,6
35,9
64,1
Khorezm
34,4
65,6
37,2
62,8
Tashkent city
69,2
30,8
81,0
19,0
In 1942, in U. Beveridge’s speech titled “Full Employment in a Free Society” in the British
Parliament, the fundamental principles of the “welfare state” were outlined, and for the first
time, the idea of a guaranteed national minimum income was introduced. Achieving these
goals required the state’s social policy to be closely linked with its economic policy aimed at
ensuring full employment for the working-age population.
If employment is not adequately guaranteed by the state, it may lead to various socio-
economic challenges. Key employment-related issues include:
• Elevated unemployment rates – The rapid increase in the working-age population surpasses
the pace of job creation, resulting in insufficient employment opportunities.
• Regional disparities – The underdevelopment of industrial and service sectors in rural areas
leads to restricted employment prospects.
• Labor migration – Both internal and external migration contribute to a significant outflow
of the workforce seeking better job opportunities abroad.
• Seasonal and temporary employment – High dependence on seasonal jobs in sectors such as
agriculture and tourism hinders workers from obtaining stable, long-term employment.
Dynamics of labor Resources and the Employed Population in the Republic of
5
G.Q. Abdurakhmanova, X.X. Abduramanov. Social Sectors and Human Development. Textbook – Tashkent, 2018.
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Uzbekistan, ( in thousand person)
Unemployed individuals in need of job placement – These include persons officially
registered as unemployed in accordance with legal regulations, as well as those of working
age who are not engaged in paid employment or income-generating activities, are
independently seeking work, and are ready to accept a job offer if one is available. Issues
related to unemployment constitute a fundamental aspect of social and labor relations in the
labor market. The existence of unemployment leads to significant and often irreversible
economic losses for society.
One of the reasons for temporary unemployment in our country is the imbalance between
labor supply and demand. In other words, a significant portion of the unemployed population
consists of unskilled workers and young individuals entering the labor market for the first
time.
In order to promote self-employment among vulnerable populations and support their
entrepreneurial initiatives, subsidies are allocated from the Entrepreneurship Promotion
Fund through the “Unified Social Protection Registry” information system to individuals
recognized as low-income. These subsidies aim to encourage employment and engage them in
entrepreneurship. According to the Regulation on the Procedure for Allocating Subsidies from
the Entrepreneurship Promotion Fund of the Agency for Mahalla-Based Work and
Entrepreneurship Development, approved by the Cabinet of Ministers’ Resolution No. 252 of
May 11, 2022, an amendment has been introduced. This amendment removes the
requirement that subsidy recipients must own a household plot in order to receive subsidies
for the installation of lightweight greenhouses, the purchase of seeds, seedlings, and irrigation
equipment.
The improvement of economic well-being plays a crucial role in the social life of the
employed population. However, employment does not always guarantee an escape from
poverty. A significant portion (around 50%) of households with low consumption
expenditures consists of employees working in the public sector. Workers engaged in
seasonal and temporary jobs are at a higher risk of poverty, as their occupations often provide
income only for a limited period, while at other times, they may face a lack of stable earnings.
A number of solutions can serve as a foundation for addressing seasonal and temporary
employment issues:
• Formalizing seasonal jobs by the state: Introducing labor contracts for seasonal and
temporary workers and integrating them into the social protection system.
• Modernizing agriculture: Developing year-round income-generating activities in agriculture,
where seasonal employment is dominant (such as greenhouses and agricultural processing
industries).
• Implementing innovative technologies: Utilizing new technologies in agriculture and
industry to reduce seasonal employment and create permanent jobs.
These measures contribute to overall economic stability and enhance social well-being.
6
Official data from the State Committee of the Republic Of Uzbekistan on the dynamics of labor resources and the
employed population in the Republic of Uzbekistan for the years 2018, 2020, and 2024.
7
Resolution No.252 of the Cabinet of Ministers of the Republic of Uzbekistan, dated May 11, 2022.
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In the newly revised “Law on Employment of the Population,” support for self-employed
individuals through tax benefits and incentives has been strengthened, and their work
experience is now officially recorded.
Employment refers to activities that are not contrary to legal regulations, allow individuals to
meet their personal and social needs, and generate wages (labor income).
Self-employment includes individuals engaged in entrepreneurial activities, artisans,
members of family businesses, members of dehkan farms and production cooperatives, and
farmers. According to legal regulations, both unemployed individuals and self-employed
persons can secure employment through these means.
Research findings indicate that employment in both the formal and informal sectors has
been analyzed across different regions, revealing that economic growth has not always been
accompanied by an increase in job opportunities and overall employment. The proportion of
workers in the informal sector remains significantly higher than that in the formal sector,
leading to various challenges. To address these issues, the formalization of the informal sector
is essential.
Entrepreneurship and the private sector should be supported, particularly for young people
and the unemployed, as this will contribute to economic liberalization and stability. In
Uzbekistan, employment challenges and strategies for their resolution are outlined in the
Presidential Decree on the Development Strategy of New Uzbekistan for 2022–2026. This
document sets forth key development priorities, measures to increase employment, and
initiatives to reduce unemployment.
REFERENCES.
1. Address of the President of the Republic of Uzbekistan to the Oliy Majlis, 30.12.2020.
2. Official data of the State Committee of the Republic of Uzbekistan on Statistics.
3. Resolution No. 252 of the Cabinet of Ministers of the Republic of Uzbekistan, dated May
11, 2022.
4. G.Q. Abdurakhmanova, X.X. Abduramanov. Social Sectors and Human Development.
Textbook – Tashkent, 2018.
5.
– “On Employment of the Population” Law and Presidential Decree PF-
60, 28.01.2022 / “New Uzbekistan Development Strategy for 2022-2026.”
6. Official data of the Ministry of Employment and Labor Relations of the Republic of
Uzbekistan.
8
Decree of the President of the Republic of Uzbekistan on the new Uzbekistan Development Strategy for 2022-2026.
