This paper focuses on the relationships between higher education and the labour market in Serbia. In order to understand this relationship better, this paper will first provide a brief history of the country and the history of its higher education structures. The paper will then discuss higher education from post Second World War until the fall of communism, highlighting how tertiary education met the goal of preparing young people for life in a socialist economy. The second part of the paper will discuss higher education after the fall of communism, and will show how higher education is not inadequately preparing Serbian graduates for the needs not only of the free market, but the new global economy. (Contains 3 tables and 1 footnote.)