I use the introduction of tuition fees in seven out of the sixteen German states in 2007 as a natural experiment to identify the effects of tuition fees on enrollment probabilities of German high-school graduates. Based on information on enrollment decisions for the entire population of...

We develop a model of education where individuals face educational risk. Successfully entering the skilled labor sector depends on individual effort in education and public resources, but educational risk still causes (income) inequality. We show that an optimal public policy consists of...