This study was prepared by Elke Lüdemann while she was working in the Department Human Capital and Innovation of the Ifo Institute. It was completed in July 2011 and accepted as a doctoral thesis by the Economics Department of the University of Munich (LMU). The subject of this study is a micro econometric analysis of how schooling contributes to the formation of students’ cognitive and non-cognitive outcomes. The main emphasis is on investigating the role of educational institutions in the formation of students’ cognitive and non-cognitive skills. Besides that, the role of school peers in the formation of occupational intentions is investigated.