Gender equality policies regulate the Swedish labour market, including higher education. This study analyses and discusses the career development of postgraduate students in the light of labour market influences. The principle of gender separation is used to understand these effects. Swedish register data encompassing information on 585 postgraduate students born in 1948, 1953 and 1967 were analysed. Since higher education and the labour market are horizontally gender-divided, career options are different for men and women. Men, both those who did and did not obtain a postgraduate degree, were more likely to work within the private sector, compared to women who were more likely to complete their degrees and more likely to work within the public sector. In other words, whilst women more often remain within higher education, men, probably due to their academic specialisation, are in greater demand on the regular labour market, meaning that studies, to a greater extent, can remain incomplete. Until the 1960s higher education was very selective, where participation by women and individuals with less well-educated family backgrounds was rare. After the expansion of higher education, both the student and faculty bodies have become increasingly diversified. However, new demarcations have emerged; between those who receive research funding and those who do not, and between those who work within higher education and those who leave for other, competing options outside. (Contains 3 notes and 5 tables.)