The Extent to Which Nominal Wage Determines Employment in Public Sector: in Uzbekistan’s Case

Abstract

This article describes medium term forecast of employment in state sector, and tries to find the answer to the question of which do the common factors really cause dynamic changes in the labor market of Uzbekistan. The literature suggests that there is high and positive relationship between the common independent variables and employment. The results show that only the average nominal wage performed a statistically significance. Because of the changes in the average nominal wage, the projection of employment in state sector for medium term fluctuated between -2 and 6. Moreover, applied models in the forecast for VAR represented positive and less positive scenarios until 2025q3.