Abstract
The wage inequality remains one of the key problems of the Kazakh labor market, as wage differences are formed not only by individual characteristics of employees, but also by regional, sectoral, and gender employment patterns. The aim of the study is to quantify the relative contribution of the region of employment and the type of economic activity to the intergroup wage differentiation in Kazakhstan, as well as to determine the dominant factor based on the decomposition of the explained variance. The research methods include a semi-logarithmic regression model with dummy variables of the region and industry, employee weighting, robust standard errors, and Shapley decomposition. The results showed that the selected factors explain 75% of the wage variation between the analyzed groups. In 15 of the 20 regions, wages are statistically significantly lower than in Almaty. The largest industry premium relative to education was found in the mining industry (+111%) and financial activities (+101%), while the negative discount ranges from 11% to 18%. After accounting for the region and industry, the gender pay gap is estimated at about 12%. Shapley's decomposition showed that the regional factor explains 21% of the variance of the logarithm of wages, and the industry factor explains 45%. The results of the study can be used by government agencies to adjust employment promotion, retraining, and regional development programs.