This study exploits within-region across-time variation in labor demand to identify the effect of economic downturns on the skill content of human capital investments. Administrative data on students in German higher education shows that local labor market shocks at high school graduation decrease first-time enrollment at classic universities but increase enrollment at more applied institutions, majors, and de- grees. Survey data reveals stronger effects for risk-averse individuals and reversed effects for high-SES graduates. I argue that firm-specific rather than general skill investment is perceived as an insurance mechanism against economic uncertainties.

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.