We identify the labor market returns to university grade point average (GPA) by leveraging a nationwide change in the scaling of grades in Danish universities. Our results show that a reform-induced increase in GPA that is unrelated to ability causes higher earnings immediately after graduation, but the effect fades in subsequent years. The effect at labor market entry is largest for individuals with fewer alternative signals. Although employers initially screen candidates on the basis of skill signals, our findings are consistent with a model in which employers rapidly learn about worker productivity.

Abstract This paper studies mental health spillovers among new mothers. We exploit variation in the mental health of peers in mother groups in the Danish public postnatal care program. We show that municipal nurses assign mothers arbitrarily to groups conditional on a narrow set of well-defined characteristics. Exposure to a depressed peer in the group increases mothers' mental health care uptake by 11 percent two years after birth. We document worse self-reported mental health and labor market outcomes for treated mothers. Exploring heterogeneity, we find suggestive evidence for mental health deterioration, rather than increased demand for health care, as mechanism