SHADOW ECONOMY, INFORMAL EMPLOYMENT AND HOUSEHOLD WELFARE: REGIONAL EVIDENCE FROM UZBEKISTAN

Abstract

This thesis examines the regional dimension of the relationship between the shadow economy, informal employment, and household welfare in Uzbekistan. Using region-level estimates for seven regions, the thesis shows that regions with a higher share of informal employment also exhibit a larger estimated shadow economy and a systematically lower Household Welfare Index. The regional pattern indicates that informality is not evenly distributed across the country: it is lowest in Tashkent city and highest in predominantly agrarian regions such as Surkhandarya and Karakalpakstan. The thesis argues that regional disparities in informal employment are an important, and often overlooked, channel through which the shadow economy affects household welfare, and that regionally differentiated policy responses are likely to be more effective than uniform national measures.