Half a million higher education graduates enter the labour market every year in Mexico. While their labour market outcomes are considerably better on average than those of upper secondary education graduates, some higher education graduates face periods of inactivity and unemployment. Many graduates who find work end up being over-qualified or working in the informal sector. This report finds that the Mexican higher education system needs to be better aligned with the labour market to help students develop the skills employers seek. Students need better support to succeed in their higher education studies and develop labour market relevant skills, which will help facilitate their achievement of good outcomes in the workforce. This calls for a comprehensive whole-of-government approach and the involvement of all higher education stakeholders. The report proposes a set of policy recommendations to address these issues and help Mexican higher education graduates achieve better outcomes in the labour market. The report was developed as part of the OECD Enhancing Higher Education System Performance project and is a companion to the OECD report, The Future of Mexican Higher Education: Promoting Quality and Equity, which focuses on broader issues in higher education, including governance, funding, quality and equity, as well as two key sectors of higher education: teacher education colleges and professional and technical institutions. [For the companion, see ED592819.]