Institute for Development Studies, University of Nairobi

In the paper a wide array of data on the Kenyan labour market is examined. It is found that neither the traditional human capital model nor segmented labour market theories provide an adequate explanation of the pattern of development. An alternative explanation is proposed. First, changes in employment and earnings by occupation for the period 1964-1977 and earnings by education for the period 1968-1978 are considered. Then changes in employment prospects and migration by education are presented. Finally, a theory which is compatible with these observations is presented.