Labor market performance in Kenya : the importance of institutions

This study examines the recent performance of Kenyan labor markets and identifies the roles that specific institutions have played in mediating the effect of employment policies on this performance. Initial sections review how the "employment problem" has been perceived in Kenya over the last three decades and outline Kenya"s geographic, economic, and institutional settings. A detailed discussion follows of the structure and performance of the labor market, and of the impact of institutions (i.e., government agencies, parastatals, trade unions, etc.) on this market. A concluding section outlines a number of policies needed to encourage labor intensity in the agricultural and informal sectors; specific recommendations are to improve access to credit by all producers, reduce tariffs and other constraints to trade in order to make domestic markets more competitive, and use wage guidelines to encourage investors to adopt more labor-intensive methods of production.