This paper reports an investigation of the situation of employment in the Netherlands for individuals with mental retardation and discusses the function of schools in preparing students for the labor market. Background information on special schools for students with mental retardation is provided, focusing on vocational preparation of students. The role of Social Pedagogical Services in providing placement assistance and advice is explained. Regulations are cited, and the role of several organizations working to stimulate the employment of people with mental handicaps is examined. Two case examples are provided, one describing a school for special secondary education in Amsterdam and the other describing a mediation agency in Rotterdam which mediates between pupils who have finished special education and the labor market. The paper concludes that the creation of regulations to stimulate labor market participation of this population is a positive development, but an obstacle exists in that employees at sheltered workshops often earn more money than colleagues with mental handicaps in the open labor market. (Contains approximately 45 references and a bibliography of approximately 20 related publications.) (JDD)