SUMMARY.This article outlines a study of the inter‐relationship between children's understanding of the motives for people working, the factors which determine their pay and the reasons and consequences of losing a job. The results suggest developmental transitions in the thinking of children between 6–12 years about the relationships between work, pay and employment and demonstrate negative beliefs about the unemployed in even young children. In addition variations were found in the belief systems of children attending state or private schools emphasising the importance of socialising experiences to children's understanding of socio‐economic i