According to Government, Ghana is facing many challenges in the area of skill development and job creation. The Government is particularly concerned with: (i) unemployment among the youth (6.1 percent in 2005 for 15-24 years old), which has been attributable to the rapid population growth rate of the youth, the rapid urbanization rate, the quality of labor supply, and low labor absorption rate of the economy; and (ii) the external efficiency of the education training system and its ability to supply the skills demanded by a diversified and competitive economy. Moreover, other related concerns include: channeling economic growth toward creating jobs, including 'good jobs'; better understanding the functioning of the informal sector; explaining the mismatch between skills development and jobs; improving labor market indicators; monitoring and evaluating employment programs' outcomes; reviewing the role of labor market regulations in job creation; and reforming technical vocational education and training (TVET) systems. The key objective of Ghana's development policy is to accelerate economic growth and put the creation of new and better jobs at the center of the Government agenda. In this context, and complementing the recent Country Economic Memorandum (CEM) and earlier Bank's work on youth employment, this report addresses labor market challenges that Ghana is facing, particularly as it strives for middle income status by 2015. This report: (a) briefly reviews the determinants of labor demand; (b) analyzes labor market outcomes based on recent survey data; (c) reviews the role of labor policies, institutions and programs; and (d) examines education and skills development policies and their links to labor market outcomes.