With the emergence of ‘knowledge economies’ across the industrialised world, transitions from school to work have generally become more complex and uncertain. Nonetheless, such developments vary between countries, as young people form aspirations which align with their individual preferences, academic abilities and the economic, cultural and social capital to which they have access. Previous research emphasises the positive influence social capital received from parents and school networks has on young people's developing aspirations. Meanwhile, the social capital young people generate for themselves through ‘out-of-school’ activities is often construed as either irrelevant or problematic. In this paper, we examine the relationship between this latter dimension of social capital and the educational aspirations of young people in Australia (aged 14/15; n = 3586) and Germany (aged 14/15; n = 2517). Both countries have distinct institutional settings with varied school-to-work transition regimes. Our results show that youth-derived social capital, generated through participation in out-of school extra-curricular activities, mediates the association between parental background and educational aspirations in both countries. We suggest that, by exposing young people to broader sets of values, skills and resources not accessible within the family and the school context, such involvement may be important for promoting educational aspirations and attainment.