The role of higher education (HE) in the process of local and regional economic development has attracted considerable interest among scholars and policy makers. There is ample evidence confirming that the presence of skilled labour force contributes local economic development by fostering productivity effects via local knowledge spill overs and human capital externalities. In this context, educational programmes are designed aiming at the preparation of the high qualified young population for fulfilling responsible roles in professional life in specific and in society in general. Here, we focus on the significance of a number of HE programme characteristics in allocating young HE graduates across the labour market and how these graduates perform in their jobs. Graduate performance is analysed in terms of both monetary and non-monetary pay-offs. Findings show that education programmes in which learning is linked to acquisition of work experience result in better paid employment, although an appropriate balance between theoretical and practical-oriented curricula is important.