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The relationship between higher education and employment is commonly interpreted in terms of the extent to which the higher education sector is providing graduates with the knowledge and skills to match employment needs. It is assumed that a mismatch between working in a job and level or field of education limits the use of skills, with adverse effects on both productivity and earnings. This article examines this assumption on the basis of five countries from the European graduate survey. Although the analysis shows that educational and skill mismatches are indeed related, mismatches by no means imply mismatches between available and required knowledge and skills. The results indicate that traditional approaches of mismatches have to be adapted to more flexible forms of relationships between higher education and work.