In Egypt and Jordan there is a substantial mismatch between the output of the higher education
system and the needs of labor market. Both demand and supply-side factors could be driving this
mismatch. This paper tests a key supply-side issue, whether differences in institutional structures
and incentives in higher education affect students’ employability. Specifically, does the stronger
alignment of incentives in private, as compared to public, higher education generate more
employable human capital and better labor market outcomes? The analysis examines the impact
of higher education type on numerous outcomes, while controlling for pre-enrollment
characteristics. The results demonstrate that supply-side issues and incentives have little impact
on labor market outcomes. Family background plays by far the largest role in labor market
success. Proposed reforms to higher education often suggest increasing the role of the private
sector. Our findings indicate that this approach is unlikely to improve labor market outcomes.