While entering the labour market with a fixed-term contract facilitates upward mobility, on-call and temporary agency work early in the career are associated with unstable career paths and limited wage growth.

Our results show that entering the labour market with a permanent contract does not necessarily lead to immediate wage growth, but provides a safeguard against volatile careers with frequent transitions in and out of employment.

We propose Mixture Hidden Markov Models as a way to present a comprehensive picture of employment trajectories of young workers in the Netherlands and to study how the first employment contract is related to them.