INSTITUTIONS, INFORMALITY, AND INEQUALITY: A COMPARATIVE ANALYSIS OF WAGE–PRODUCTIVITY DYNAMICS IN GERMANY ANDUZBEKISTAN

This paper presents a comparative economic analysis of wage inequality and labor productivity in Germany and Uzbekistan. Drawing on empirical data and theoretical frameworks including human capital theory, efficiency wage theory, and labor market segmentation the study explores how institutional structures, employment types, and education systems shape wage disparities in two structurally distinct economies. Germany, with its strong labor institutions and formal employment systems, demonstrates a buffered relationship between productivity and wages, though wage stagnation persists in certain sectors. In contrast, Uzbekistan’s wage inequality is more directly linked to productivity differences, exacerbated by informal employment and weak institutional oversight. Using regression analysis, decomposition methods, and comparative visualizations, the study identifies key drivers of inequality and proposes tailored policy recommendations. The findings contribute to the broader discourse on equitable labor reform and highlight the importance of institutional design in balancing efficiency with fairness.