Much analysis of youth transitions focuses on the first year after education, or outcomes at a specific age. Such work looks, for example, at the effect of education on the likelihood of being employed or unemployed. This study takes a different angle by considering the effect of education on the persistence of labour market outcomes. For example, leaving school before Year 12 may be associated with high levels of unemployment, but the question is whether such a person is less likely to remain in employment once he or she has a job, compared with people with better educational qualifications. Specifically, this study examines the role that post-school qualifications play in the annual transitions between labour market states for young Australians and is based on the 1995 cohort of the Longitudinal Surveys of Australian Youth (LSAY). The labour states that were examined were: (1) permanent employment; (2) casual employment; (3) unemployment; and (4) not in the labour force. The effect of personality traits and ability on labour market transitions was also examined. We know that having post-school qualifications, particularly higher-level qualifications, increases the chances of permanent employment, and the study confirms this. However, by focusing also on the occurrence of persistent labour market states, this work generates new insights. The study finds that the most persistent labour market states are casual employment for men, while for women it is being out of the labour force. Having at least a certificate IV for women or a bachelor degree or higher for men provides a buffer against undesirable labour market states, such as unemployment or being out of the labour force, becoming persistent. (Contains 11 tables and 21 footnotes.)