The paper analyzes the current problem of the mismatch between the educational system and the needs of the labor market. The secondary objectives of the work refer to the theoretical aspects of the labor market as well as the conceptual definition of the labor market. Furthermore, employment policy and issues are elaborated in detail, and the concept of flexicurity is explained in more detail. The paper analyzes the significance of the educational system in the Republic of Croatia and elaborates its legal and institutional framework. The analysis also includes the attitude of the Republic of Croatia towards higher education, as well as the trend of unemployment according to the level of education. Certain active employment policies that contribute to increasing employment and participation of young people in the labor market, eliminating long-term unemployment and reducing the mismatch between people's knowledge and skills are clarified within the work. The main goal of this work is to work out the factors that influence the state of inconsistency in order to better understand the problem so that the same problem can be solved in an efficient way and so that a valid conclusion can be made about what needs to be done in order to bring harmony between the markets work and education system.