Contemporary teaching is concerned not only with imparting knowledge but also with developing skills and strategies for further learning. This paper looks at the Spanish graduates’ views of their preparation for the labour market. The Flexible Professional in the Knowledge Society (REFLEX) data set is used, which contains information on almost 4,000 young Spanish graduates. Overall, graduates considered their levels of competence matched their current job requirements rather well. Econometric evidence from different ordered logit models proves that innovative modes of teaching and learning, and assessment used by higher education institutions play a key role in competence development. This is consistent with the view that education raises productivity somehow; a finding that refutes the economics literature which suggests that education – including higher education – may be no more than a screening device which allows employers to identify the more able potential employees from the rest. Besides the importance of formal academic institutions, families and firms also appear as sources of learning and skill formation.
