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This chapter examines the pattern of association between educational qualifications and labour market outcomes for men and women in Israel. The effects of academic and vocational qualifications on occupational prestige and class of labour force entry are compared and the relationship between qualifications and unemployment is studied. As well as gender comparisons, ethnic differences and the mechanisms of discrimination in the relationship between educational qualifications and occupational outcomes are also examined. While the results of earlier studies suggest that in Israel primary education carries little weight in the occupational attainment process, the effects of secondary schooling and tertiary education are strong. This study shows that the pattern of the relationship between education and occupational outcomes is more complex, being linear for Jews and exponential for Arabs, reflecting the interaction between discrimination and the benefits of the ethnic enclave.