Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth

•
capacity—the level of formal education as a result of past investments
in education; 
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development—formal education of the next generation’s workforce and 
continued upgrading and changing of the current workforce’s skills; 
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deployment—skills application and accumulation among the adult 
population; and 
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know-how—breadth and depth of specialized skills use at work.
The chapter highlights the issues related to human capital development 
and skills mismatches in Uzbekistan and provides some policy suggestions 
to address them. Section 3.1 depicts the country’s demographic dynamics. 
Section 3.2 describes the country’s social and economic development since its 

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Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth
independence; section 3.3 tackles Uzbekistan’s state of education, including 
the gap between the supply of and demand for skills; section 3.4 presents 
labor market outcomes; section 3.5 discusses labor migration; and section 3.6 
concludes by summarizing policy options for closing these gaps. 
3.1. Demographic Dynamics
Uzbekistan’s working age population has increased from 11 million in 1990 
to almost 19 million in 2017. As the working age population increases and 
birth rates decline, the total dependency ratio—the ratio of the young 
(aged 0–14) plus old (over age 65) population to that of working age—has 
declined substantially, from 82% in 1990 to less than 50% in 2017. At present, 
Uzbekistan is on the threshold of what can be described as a golden age of 
economic growth, where labor participation will be at historically high levels 
and lead to record economic growth, placing Uzbekistan on the road to rapid 
economic development. A key to this will be the pace at which Uzbekistan 
engages skilled youth in place of its unskilled older workers. Taking advantage 
of the demographic dividend can lead not only to growth but also can push 
Uzbekistan’s economy toward upper-middle-income status. 
Between 2010 and 2040, an additional 8.9 million labor entrants are expected, 
increasing Uzbekistan’s labor supply to 27.8 million (Figure 3.1). Therefore more 
jobs are needed to absorb the expected new labor entrants. The additional 
working age population will reduce the country’s dependency ratio to 46.0% 
by 2040, possibly leading to additional economic growth or a demographic 
dividend. However, after 2040, the working age population is expected to start 
shrinking as the share of the older population increases more quickly, leading 
to a path similar to that experienced by the aging economies in Europe, with a 
shortage of young workers and a high dependency ratio (World Bank 2016a).
Enabling the expected demographic shift to rapidly expand the consumer 
base and raise productivity can help fuel faster economic growth by taking 
full advantage of this window of opportunity. In doing so, it is important to 
boost the creation of more jobs that match the current supply of skills, and 
likewise support the development of skills to match future demand. This will 
help prepare the country as it contends with an aging population and a higher 
dependency ratio starting in 2040 (World Bank 2016a). 

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