Search

This thesis examines labour market dynamics and economic development in Zimbabwe over the period 1980 to 2005. It explores the structure and performance of the labour market as well as poverty and livelihood diversification. The labour market is chosen for study because it plays a key role in distributing income and in fighting p~verty. It also has potential to play a critical role in resolving the current economic crisis. For detailed analysis, the study period is divided into three sub-periods, 19801990 (the interventionist period), 1991-1996 (the economic reform period) and 1997-2005 (the crisis period), and labour market structure and performance are examined in each period. Case studies and quantitative and econometric methods are used to investigate labour market outcomes. Further, the labour market under crisis conditions is divided into rural and urban segments because the two respond differently to policy changes. The analyses show that during the crisis period there was substitution of the informal for formal employment in the urban sector; and that the crisis caused massive decline in capacity utilisation. In the rural sector, it was observed that households increased their labour supply in response to wage levels. However, the supply response was stymied bytoo low rural wages. Further, their ability to hire in labour was influenced by. household income, particularly by the proportion of non-farm income. The main conclusions are that labour market liberalisation is not a sufficient condition for employment growth; that although the labour market thins out and/or changes form in response to economic conditions, it is resilient; and that the spatial differences in this resilience imply that although the labour market can be used as an instrument to fight poverty, it does not work well in all areas and for all households. This calls for hybrid approaches to tackling poverty. It is also concluded that under crisis conditions, piecemeal reforms have been ineffective and may indeed have worsened econ'omic recession. Given Zimbabwe's severe state of macroeconomic disequilibrium, the revival of the economy will now require comprehensive political and economic reforms in order to achieve stability.