Despite tremendous advances in women’s educational attainment and employment over time, women still enrol into different fields of study than men and earn less once they enter the labour market. These aspects are interrelated, as fields of study preferred by women are associated with lower wages. This thesis aims to disentangle the process, in which gender differences in field of study choices emerge and transform into gender inequality in the labour market through four steps: occupational expectations in adolescence, field of study choices in higher education, early labour market careers, and subsequent employment trajectories. Empirically, each step is addressed by means of a quantitative analysis, with data sets, key predictors, and modelling strategies accommodating the specific research question at hand. The results confirm previous research and offer new insights on specific explanations. First, gender differences in task-related preferences, i.e., occupational interests, are important for explaining horizontal sex segregation. Occupational interests are strongly related to subject-specific specialization and performance in the secondary educational system, suggesting that young men and women develop gender-specific skill- and interest profiles throughout their educational trajectories. These profiles seem to align with cultural notions of tasks and skills particularly suitable for each gender. The results also show that the labour market and the occupational structure are important institutions embodying such norms of masculinity and femininity. Thus, certain environments seem to strengthen gender differences in occupational preferences. Mechanisms driving educational choices, such as interests, seem to differ from those that foster gender inequality in the labour market. In specific, the extent to which educational and occupational decisions transform into labour market inequality is contingent on the institutional setting. While the results confirm that the sex composition of fields of study and occupation structures gender inequality, it does not evoke disadvantage across all contexts. Finally, horizontal sex segregation does not affect labour market trajectories of men and women similarly. Thus, theoretical explanations need to be adapted to accommodate gender-specific patterns, which, in turn, might be context-dependent.The horizontal sex segregation is resilient to change if the occupational structure supports a realization of ‘gender-typical’ occupational interests. Meanwhile, gender differences in occupational interests are not necessarily detrimental for employment trajectories, if the labour market enables highly-qualified women to pursue these paths in well-remunerated occupations.