The pathways of Australian graduates in their transition from school to further study and work were examined by analyzing Australian Youth Survey data regarding graduates who obtained a university degree or technical and further education (TAFE) diploma and who were enrolled for such qualifications in their seventh postschool year. Ninety-four percent of young Australians who obtained tertiary qualifications made relatively successful transitions to full-time work. Only 6% recorded experiencing major difficulty in obtaining stable full-time work or extended episodes of unemployment, part-time work, or periods out of the labor force. Characteristics associated with difficulty finding stable full-time employment were as follows: graduating a TAFE rather than with a university qualification; being from a low socioeconomic background; graduating in the fields of arts and humanities, social sciences, or education; and graduating from government schools. Although labor market benefits for graduates varied depending on pathway and study, tertiary qualifications appeared to smooth young people's transition to work. The study results supported recent policy efforts to expand the number of tertiary places and alter policies regarding government income support so as to encourage more young Australians to participate in tertiary education. Definitions of the study variables and two additional tables are appended. (Contains 21 tables and 5 references.) (MN)