Countercyclical college enrollment is a stylized fact in economics. However, the empirical evidence focuses on countries with highly cyclical outside options. This study investigates the effect of local labor market shocks in a dual education system, where apprenticeships provide a safe outside option. Administrative data on German higher education reveal that lower labor demand at high school graduation decreases first-time college-going. The effect is concentrated at public universities, while more graduates enroll at more vocationally oriented colleges or start an apprenticeship. Recessions can cause a shift in human capital investments towards applied skills, which come with direct remuneration.

Using detailed data from a unique survey of high school graduates in Germany, we document a gender gap in expected full-time earnings of more than 15%. We decompose this early gender gap and find that especially differences in coefficients help explain different expectations. In particular, the effects of having time for family as career motive and being first-generation college student are associated with large penalties in female wage expectations exclusively. This is especially true for higher expected career paths. Resulting expected returns to education are associated with college enrollment of women and could thus entrench subsequent gaps in realized earnings.

Following a landmark court ruling in 2005, more than half of Germany’s universities started charging tuition fees, which were later abolished in a staggered manner. We exploit the fact that even students who were already enrolled had to start paying fees. We show that fees increase study effort and degree completion among these students. However, fees also decrease first-time university enrollment among high school graduates. Combining this enrollment impact with the effect on completion, we find that fees around the zero-price margin have only little effect on overall educational attainment. We conclude by discussing policies targeting the separate effect margins of fees and caution against a general abolition.