How do financial frictions affect the type of human capital investments that students make in college? To study this question, I build a novel dataset covering more than 700,000 U.S. students, merging commencement records with address histories, credit bureau records, and professional resumes. I document that students trade off initial earnings against lifetime earnings when choosing college majors and that students from low-income families are more likely to choose majors associated with higher initial earnings but lower lifetime earnings. I provide causal estimates of how student debt affects this trade-off using the staggered implementation of universal no-loan policies across 22 universities from 2001 to 2019. I find that students who are required to take on more student loans to finance their education choose majors with higher initial earnings but lower lifetime earnings. Furthermore, student debt affects students differentially depending on their family backgrounds: Students from low-income families display greater sensitivity to changes in student debt. Finally, I show that differences in student debt amounts lead to different job profiles and earnings later in life. Combined, these findings highlight the role of financial frictions in human capital investments and subsequent labor market trajectories.

Using repeat-sales data on apartments in Sweden, we estimate the gender gap in housing returns. We confirm that single women’s returns gross of renovations are lower than single men’s by more than 2pp, that half of this gap is due to market timing, and that it is concentrated in short holding period. Adding administrative data on renovation expenses and traders’ background, we find that women are much less likely to undertake renovations and to specialize in real estate professional activities. Once these differences are accounted for, we do not find any gender gap in real estate returns.

How do shocks to property taxation affect lifetime wealth accumulation and investment? We examine a unique 18th-century tax reform in Holland which resulted in large and unanticipated changes in the effective tax rates on real estate wealth, plausibly exogenous to the owners and different for each property. We find the reform capitalized into house values in the short-run and had large impacts on household wealth that grew substantially over time. On average, a one percent shock increased wealth at death by 3.5 percent. We show these effects are consistent with the fact that households do not update housing consumption in response to large tax changes: large positive or negative shocks had few impact on the likelihood of selling voluntarily, even in a liquid market with low transaction taxes. Instead, changes in taxation primarily affected annual saving. The shock had a very large impact on foreclosure rates and still affected property-level vacancy and owner-occupancy rates 70 years after the reform. Our findings suggest that shocks to property taxation have large and persistent effects on household wealth and the housing stock.