I study the consequences of letter grades serving as coarse measures of academic achievement using university administrative data that record both the letter grade and the precise mark (0–100) received for each course that a given student takes. I exploit a regression discontinuity design with marks as the running variable. I find that receiving a better grade in a single class results in USD 32 greater monthly earnings after graduation, a 1.4% increase. I also find that marginal students who receive a worse grade take significantly easier courses and earn lower grades in future semesters.

We propose a quantitative spatial model featuring heterogeneous worker groups and their travel to consume nontradable goods and services. We consider the opening of the Downtown Line in Singapore, which connected regions where high-income households have residential amenities to where nontraded sectors are productive. Leveraging transit farecard data, we show that high-income workers saw large welfare gains but low-income workers gained little. Everyone enjoyed improved access to consumption opportunities, but low-income jobs in nontradables moved to less attractive workplaces. Abstracting from consumption travel understates the disparate impact across worker groups threefold.