We analyse the extent of intergenerational transmission through parental capital, ethnic capital and neighbourhood effects on several aspects of the school-to-work transition of 2 nd generation immigrants and young ethnic Danes. The main findings are that parental capital has strong positive effects on the probability of completing a qualifying education and on the entry into the labour market, but it has a much smaller impact on the duration of the first employment spell and on the wage level. Growing up in neighbourhoods with a high concentration of immigrants is associated with negative labour market prospects both for young natives and 2 nd generation immigrants.