Along with upbringing, education is an extremely important area of social interaction that not only responds to basic social needs, but also ensures adequate social development. In other words, the education system is a key institutional factor through which young people develop their own knowledge, skills and competencies. Ultimately, they acquire formal certificates of the same. As mentioned above, education system, in addition to shaping the chances, also influences certain inequalities of the individual in the labor market and at the macro level also shapes the structure of the offer inthe labor market. The development of a more efficient and pervasive education system, aimed at producing a competent, competitive and technologically intelligent workforce, is determined by the growing requirements of the knowledge, society and the requirements of survival in the face of growing global competitiveness. The fact is that the labor market is one of the most sensitive, but also the most complex market, whose basic indicators are: working age population, labor force, employment rate and unemployment rate. The harmony between the occupation in which the individual works and the previously acquired knowledge can be observed in two ways - horizontally and vertically. Vertical compliance is compliance that is between the level of education and the level of education required for the job the employee is performing. On the other hand, horizontal harmonization is the harmonization that is manifested between the area of employee education and the area of knowledge and skills required to perform the work on which the employee works. The topic of this research paper is an educational mismatch in the labor market. The theoretical part of the topic was explained by applying different research methods and through different data sources. Also, the practical part refers to the comparison of the Republic of Croatia with other countries. In the practical part, the importance of education for the labor market is analyzed, then the horizontal and vertical mismatch and the effects of educational mismatch on wages. The research period is five years and all collected data are presented in tables and graphs.