ENIn a knowledge-based economy, education has become the foundation of the development of the modern world. It is impossible to increase the quality of human capital without an efficient, flexible and properly targeted education system. Meanwhile, in many European countries the unemployment level among young people is very high. Moreover, there is a simultaneous increase in the number of young people with higher education and the number of unemployed graduates. According to the experts, one of the main reasons for this state of affairs lies in the quality of the education system. One can argue that there is a decline in the quality of education, which means that holding a diploma does not ensure the possession of specific skills and competencies. In this paper, education is considered as an important factor contributing to the quality of human capital. The analysis concerns the situation of young people in the Lithuanian labour market viewed through the prism of the level of education and the level of skills acquired during their studies at universities.