Our discussion starts with the US as a disturbing example of the impact of neo-liberal thinking on unequal prospects of youth by considering the consequences of social origin on transition processes and outcomes in the changing economic and political contexts of education and work. The first stop is perhaps surprisingly not Europe but the US, which economically sets the agenda for what happens in the countries to which it is closest, such as Germany and the UK in Europe.

Social inequality is a basic feature of societies that is built on the unequal distribution of property and income from work. For social scientists there are generally four dimensions to be distinguished: education, occupation, income, and wealth; these stratify the population into segments of people with different life chances and social mobility prospects. Since the beginning of the 21st century, as comparative research shows, there has been a widening disparity in the life chances associated with these strata between the social classes in the western democracies (see Blossfeld et al, 2005, 2008; Picketty, 2014).

Educational inequalities have characterised the differentiation of pathways to adulthood since the 1970s (Jencks, 1972) in the US and in the post-social democratic period increasingly in Europe, where the global trend towards higher education as a means of achieving social mobility became popular. The effect of family and schooling on young people's transition to employment and independent living arrangements has been widely documented. During the subsequent decades, the gap between lower and higher education became larger, due to the concentration of wealth and academic credentials in the upper classes. Moreover, as research shows, the middle class is divided into two segments: traditional middle class and new middle class, both fearing downward social mobility due to globalisation and the digitalisation of work (Gilbert, 2002).

In Germany, the traditional middle class consists of VET graduates, skilled workers, qualified service employees, and small and middle-sized enterprises (SME), whose values are centred on status maintenance, material well-being and an orderly life. The new middle class consists of HE graduates (BA/MA), whose value orientations are focussed on self-realisation, quality of life and cosmopolitism.