Recording A Working Life: Length-of-Service, Labour-Market Informality, and the Pension Coverage Gap in Uzbekistan

Pension entitlements in contribution-based old-age insurance systems are earned, not granted: benefits are a direct function of a documented labour-market career, or stazh. Where large shares of employment go undocumented, length-of-service accounting itself becomes a channel through which labour informality is converted into old-age poverty. This paper examines that channel in Uzbekistan, whose pay-as-you-go pension system covers only 38 per cent of the working-age population. Combining an institutional analysis of Uzbekistan’s pension formula, an original micro-simulation of benefits under alternative service-record scenarios, and a cross-sectional regression on a 47-country dataset, the paper asks how much of the coverage gap reflects labour informality versus the design of the record-keeping mechanism itself. Uzbekistan’s measured informal-employment rate is significantly lower than its income and demographic profile predict (p < 0.05), yet only 30 per cent of registered self-employed citizens contribute voluntarily, and a seven-year service interruption cuts a representative worker’s pension by nearly a third. The paper closes with policy recommendations and directions for future research.