Labor Market Policies and Outcomes

Abstract

In 1980, the incoming Zimbabwe government adopted an interventionist approach to the labor market. Its main interventions took the form of wage policies (intended to raise the incomes of poor workers and to reduce income inequality), employment policies (intended to protect and expand employment, particularly the employment of relatively unskilled workers), and educational policies (which, in the long term, would promote the same objectives). In 1990, as part of its economic reforms program (ESAP), the government began to deregulate the labor market. There was to be less government intervention in labor relations, in wages and in employment, and the public sector was to be reduced in size. How successful were government policies in pursuing these objectives of inter-personal and intertemporal income redistribution – of redistributing income to the African majority while encouraging rapid growth of the economy? That is our central question. Thus, this chapter analyzes labor market policies and outcomes in Zimbabwe since independence with two distinct purposes. The first is to understand the labor market in order to inform policy making and the second is to consider whether lessons from this experience can be drawn for the new millennium. However, this chapter concentrates on the first of these two objectives.