Education is the main resource for obtaining employment for young people entering the labor market. European countries differ widely in the institutional structure of their education and training systems and labor markets in that different resources are provided to school-leavers entering into working life in different countries and these new job-seekers face varying institutional and economic contexts in labor markets. The crucial role of educational qualifications for successful labor market entry in 12 European countries in the mid-1990s was analyzed, drawing on the 1992-97 European Community Labour Force Survey. The goal of the study was to gauge the extent to which cross-national differences in labor market outcomes for market entrants can be related to institutional differences between countries in qualification profiles of school-leavers and differences in the relationship between qualifications and early labor market outcomes. Unemployment and occupational allocation as two major dimensions of early labor market outcomes were analyzed, applying multilevel modeling to a database of repeated comparative cross-sectional surveys. The results indicate that institutional differences in both education and training systems and labor markets play a major role in explaining cross-national differences in the experiences of young people entering the labor market in European countries, even after accounting for the effects of variation in economic conditions and other unmeasured heterogeneity between countries and types of qualifications. (Contains 79 references.) (Author/KC)