Cluster-Seminar Öffentliche Finanzen und Lebenslagen

This study uses administrative data on the universe of students in tertiary education in Germany and shows that university enrollment depends negatively on the local unemployment rate at high school graduation. This finding contradicts common evidence on countercyclical US undergraduate enrollment. Students' financial dependency and loan aversion suggest reduced parental income as dominant mechanism. During times of higher unemployment, students substitute away from purely academic universities and towards more vocationally oriented colleges and degrees. Recessions further increase the share of students in STEM fields, but decrease enrollment in teaching degrees.