Although Egypt has made substantial progress with respect to access to education, the educational system is not providing markets with the quantity and quality of educated individuals most in demand. This paper addresses this paradox as an economics phenomenon and suggests that education reform should go beyond building schools, training teachers and improving curriculum. The proposed approach first deals with aligning incentives of students, teachers, parents, bureaucrats and private sector education providers. Secondly, it involves market reform to expand the demand for labor. The third and final set of reforms is aimed at corrections of market failure to ensure efficient delivery of education equitably.