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This study uses six years of data from the National Longitudinal Surveys of young males and females to investigate how young people adapt to the market place. A five component recursive model is sequentially estimated for each age from l8 through 27. The components are: education and labor force status, wage determination, turnover, unemployment duration, and wage growth. Evidence is found that competitive forces operate over the long run in the youth labor market. Productive capabilities are rewarded, and workers initially earning less (more) than their potential move up (down) the wage distribution. Job changing facilitates this equilibration, although turnover among females appears to be less purposeful than for males. We also find that deteriorating aggregate economic conditions severely disrupt the youth labor market, increasing unemployment and depressing wage growth.