The introduction of the Bachelor- and Master's degrees in Germany occurs in the framework of the harmonisation of the European higher education system, the so-called Bologna process. A central goal of the process is to support the mobility of students and of qualified workers. The European Higher Education Area that is planned to result from the process by 2010 is expected to ensure excellence in research and to enhance the innovation capacity of the European countries. These goals are of particular relevance for Germany. The report of the experts commission Forschung und Innovation (EFI, 2008) underlines the „extraordinary importance“ of research and innovation for the german economy and sees a particular obstacle to innovation in the existing lack of skilled workers (EFI, 2008, p.4 f.). The lack of skilled labor is expected to become even more severe in the coming years as a result of the ageing of the population and the specialisation of the economy on services and technology intensive sectors (see also Egeln, 2002 and Schüssler and Funke 2002). In addition, the tertiary graduation rate is low in Germany in international comparison and education inequalities are particularly pronounced.The created Bachelor's and Master's degrees were aimed to be as flexible as possible in adapting to qualification needs of potential students including persons already on the labor market (see Kultusministerkonferenz 2006). Moreover, the international comparability of the new degrees should increase the attractivity of the German higher education area as well as the mobility of german students and future employees (see also HRK, 2004). Another major objective of the restructuring of the higher education system is to increase the number of higher education students (in particular the participation rate to higher education of students with low educated family background), and to reduce thereby the lack of skilled labor. The supply of the shorter and better adapted new degrees is considered a suitable instrument to increase the attractivity of tertiary education and to increase the number of graduates. For most german universities the implementation of the new degrees has taken place very recently and little experience has as yet been gathered. The new degrees were introduced for trial in the year 2000 by legislation (Hochschulrahmensgesetzes 1998) but they are available as a regular choice of studies only since 2002 (see HRK, 2004, p.69). There has been a series of qualitative studies since the early implementation phase, that focus on the new studies and transition of graduates into the labor market (see Schomburg/Teichler 2007 as well as the review in Rehburg 2006, p. 90). The available data were insufficient until now to realise a quantitative study of the succes in the labor markte of the Bachelor and Masters graduates. In the winter semester of 2001/2002 only 2,7% of all german students were studying in Bachelor- or Master's programs (see HRK, 2004, p 70). If one considers that it takes on average 5 to 6 years to reach the Master's degree, it is clear that in the available data (the latest are from 2007) we observe only few transitions onto the labor market.Based on the objectives of the introduction of the new degrees, we use the newest available data to estimate inhowfar the new (shorter and more praxis oriented) degrees effectively affect (1) The participation rate to higher education (2) transition rates to the Master's degree and (3) transitions to the labor market of the new graduates. Our study will focus in particular on those study majors that are most relevant for the innovation rate. The EFI-report e.g. underlines the high relevance of the Science and Engineering disciplines as well as Information and Communication technologies (see EFI, 2008, p. 100). In our opinion, this proposal relies on the currently most appropriate dataset to study the transition to the Bachelor's and Master's degrees empirically. For the quantitative analysis of the participation rates, the transition rates to the Master's degrees and graduation rates we use the student statistics („Statistik der Studenten“) of the Federal Statististical Office (Statistisches Bundesamt). This newly available individual dataset contains information on all students attending higher education in Germany. As a result, they are very appropriate to estimate the effects of the higher education reform in a representative way. In addition, the provided individual characteritics allow us to analyse quantitatively the impact of the reform on inequalities in access to tertiary education (for instance with respect to gender or migration background). In order to analyse the transition to the labor market particularly with regard to the horizontal job match (the quality of the fit between the studied discipline and the required knowledge for the job) the INCHER-graduates data are the best data available. With these large scale survey data of the graduates of year 2007 we have the first representative individual dataset that contains larger numbers of graduates with Bachelor's or Mastser's degrees. Additional analyses rely on the „Studierendensurvey“ (Universität Konstanz).