A Dissertation Submitted to Mzumbe University, Dar es Salaam Campus College in Fulfillment of the Requirement for the Award of Masters Degree of Public Administration of Mzumbe University .2014Unemployment and underemployment continue to be serious social problems in Tanzania despite some improvements in recent years. This study attempted to assess the challenges facing graduate job seekers and discuss their role in explaining and solving the problem of unemployment. In doing so the study used a sample of 56 respondents that were selected by using purposively sampling technique as the study population. Data were collected by using interviews, questionnaires and documentary reviews. The study finds that there are different policies and strategies introduced and implemented by the government to generate employment. Those policies and strategies on the demand side of the labor market include special incentives and supports provided to private sectors and public employment generation schemes. On the supply side of the labor market, there are significant efforts to improve labor productivity in both farm and off-farm activities. These interventions are constrained by the extensive informal sector in Tanzania, the low demand for labor and lack of government budget. The labor market institutions that govern employment relations in Tanzania are generally found to be weak. This weakness is characterized by limitation of the legal framework and lack of social dialogue among institutions.