Differential Effects of Skilled and Unskilled Migration on Formal Sector Wage Structures in Uzbekistan and Kazakhstan During Economic Transition

This study examined how skilled and unskilled migration differentially affected formal sector wage structures in Uzbekistan and Kazakhstan from 2019 to 2024. Using difference-in-differences analysis with instrumental variables on region-sector-quarter panel data, the research found skilled migration generated wage premiums 2.2 times larger than unskilled migration effects. Instrumental variable estimates revealed skilled migration increased wages by 38.6% while reducing inequality, compared to 16.4% wage increases from unskilled migration. Capital-intensive sectors showed stronger responses than labor-intensive industries, with Kazakhstan exhibiting larger effects than Uzbekistan. Effects operated through productivity channels, capital accumulation, and positive sorting. These findings inform skill-differentiated migration policies in transitional economies.