Convergence Across Regions in Kazakhstan

This chapter analyzes unequal regional development in Kazakhstan. Applying the nonlinear least squares (NLS) method in presence of spatial correlation, we estimate the convergence rate of wages across Kazakh regions for the period 2003-2009. The estimated convergence rate is about 3.5% which is somewhat higher than the estimates obtained for the USA and Europe implying that half of the gap between regions is reduced in about 20 years. We do not find any significant effect of resource abundance on growth. However, human capital is an important factor contributing to growth. Our estimates indicate that a 1% increase in the share of students increases the growth rate by 0.18% points.