Education has always had a big role in people's lives. It is a way of determining our direciton in the future and trying to succeed in achieving our goals. It is a tool that helps us and guide us through challenges in life. Since past, education has always been a way to get better oppurtunities and enable enough resources to create a life as one desires. Not everyone could get a proper education, but those who got it had huge benefits from it. But, today is a different situation, especially in Croatia where we are facing a very high unemployment rate even with people who have high levels of education and lack of people working in craft areas which is a product of a mismatch between the demand and supply of occupations needed on the market. Also a very low distribution of GDP in education and science,the percenta of GDP invested in education is to low to make any sort of changes. In this thesis it will be discussed about the importance of education in lowering unemployment in Croatia and selected EU countries. The analysis involves facts and evidence about the significance and interconnection between education and unemployment and shows comparisons with Croatia and coutries in the EU that have a different and effective approach of economic distribution of GDP and flexibility of occupations and education that is consistent with market needs. It is evident that system of education in Croatia needs tranformation and that unemployment it's not just a result of economic crisis that occured or the lack of companys and jobs. In this thesis will be proved with statistical data, tables and graphs the huge importance of education in loweirng unemployment and how Croatia should solve these problems also how it should get a hold on more developed EU countries.