This paper investigates the sources of wage growth over the life cycle, determined by sectoral and firm mobility, unobserved ability, the accumulation of cognitive-abstract or routine-manual skills, and whether workers enroll in vocational training at the start of their career. Our analysis uses longitudinal administrative data over three decades and shows that routine-manual skills drive early wage growth, while cognitive-abstract skills become more important later. Moreover, job amenities are an important determinant of mobility decisions. Vocational training has long-term effects on career outcomes through various channels and generates returns for both the individual and society.

We examine heterogeneous treatment effects of a universal child care program in Germany by exploiting variation in attendance caused by a reform that led to a large expansion staggered across municipalities. Drawing on novel administrative data from the full population of compulsory school entry examinations, we find that children with lower (observed and unobserved) gains are more likely to select into child care than children with higher gains. Children from disadvantaged backgrounds are less likely to attend child care than children from advantaged backgrounds but have larger treatment effects because of their worse outcome when not enrolled in child care.