There has been a substantial disparity in the job prospects between higher education graduates from urban regions and those from the countryside in China. In other words, higher education graduates from cities find it easier to obtain jobs and to obtain better jobs than their peers who have grown up in the countryside. Against this background, the concept of "employment capability" of graduates is outlined in the article. This study conducts an analysis of the two groups' differences in employment capability and concludes that employment capability has a growing influence on the job prospects of higher education graduates in a nation with a market-oriented employment mechanism. Students growing up in the cities generally have a higher level of employment capability than those raised in the countryside before they go to university, and China's higher education system has been proven to be of little help in narrowing the gap. That is why the disparity between the job outlooks for urban and rural higher education graduates has been so dramatic. To bridge and close the gap, strong measures must be adopted to build a fair higher education system and to narrow the difference in employment capability between urban and rural graduates. At the same time, a transformation from an examination-oriented education system to a system focusing on all-around development should be promoted to balance educational development in different regions of the country. (Contains 2 notes and 3 tables.)