A recent survey showing that more working-age adults are increasingly relying on retirees for financial support reveals a deeper structural problem within Kenya’s economy. Pension income, originally intended to guarantee dignity and stability in old age, is increasingly being stretched to meet the everyday needs of entire households. While intergenerational support has long been part of Kenya’s social fabric, the growing scale of dependency points to labour market weaknesses that require urgent policy attention.
At the centre of this issue is the inability of many working-age adults to secure stable, productive employment. Kenya’s youthful population should be a demographic advantage, offering a large and energetic workforce capable of driving economic expansion. Instead, persistent youth unemployment, underemployment, and precarious informal work have limited earning potential. Many young graduates rotate between short-term contracts, gig work and low-paying informal roles, delaying financial independence. As incomes stagnate or disappear, families increasingly turn to pensioners as fallback providers. Reducing this dependency requires strengthening labour market institutions and creating sustainable employment pathways.
First, job creation strategies must prioritize sectors with high employment absorption capacity. Manufacturing, agribusiness value chains, affordable housing construction, and digital services present strong opportunities. Targeted tax incentives, reduced regulatory bottlenecks, and improved infrastructure can help small and medium-sized enterprises expand and hire more workers. County-level industrialization strategies could also decentralize opportunity beyond major urban centres, easing geographic inequality in employment access.
Second, skills development must better align with industry needs. A persistent mismatch exists between academic training and labour market demand. Expanding Technical and Vocational Education and Training (TVET), strengthening apprenticeship programs, and encouraging structured collaboration between universities and employers can improve job readiness. Real-time labour market data systems would further guide students toward sectors experiencing genuine demand, reducing frictional unemployment.
Third, the informal sector requires thoughtful integration rather than neglect. With the majority of Kenya’s workforce operating informally, policies should encourage gradual formalization through simplified tax regimes, affordable social security contributions, and digital registration platforms. Formalization improves income stability, increases productivity, and broadens the pension contribution base, strengthening long-term social protection systems.
Access to affordable finance is another critical lever. Many working-age adults possess entrepreneurial potential but lack capital. Expanding credit guarantee schemes, supporting microfinance innovation, and enhancing financial literacy can transform small-scale enterprises into sustainable income generators capable of employing others. Ultimately, macroeconomic stability underpins all labour market reforms. Predictable fiscal policy, controlled inflation, and stable interest rates foster private investment, which remains the primary driver of job creation.
Intergenerational solidarity is a strength of Kenyan society, but retirement income should not serve as a substitute for a functioning labour market. By implementing coherent labour policies that expand opportunity, align skills, and encourage enterprise, Kenya can restore balance by ensuring that retirees enjoy financial security while working-age adults achieve true economic independence.
