This paper examines the challenges facing the labour market in the Caribbean. It uses a combination of past studies and interviews with key informants to identify the key challenges and main policy responses. The main challenges are youth unemployment, the mismatch between the educational system and the needs of the labour market, the creation of jobs, the low levels of productivity coupled with relatively high wages, the emigration of skilled labour from the region and inadequate labour market information. A number of policy measures are suggested for dealing with these challenges: educational and training reform, gainsharing schemes, export promotion, greater social dialogue, revised labour legislation, establishment of mutually advantageous relation with citizens living outside of the region, and development of a labour market information system.