Abstract: A perennial question in economics is whether education builds skills or provides signals on students’ underlying abilities. This can be difficult to separate in that schooling levels are endogenously chosen and it is difficult to measure the skills that students develop and their underlying abilities. We present new, preliminary evidence from Brazil.  Brazilian education was largely unregulated in terms of school accreditation, and many adult high schools sold diplomas for a fee in the market without any corresponding coursework. These diplomas were subsequently registered as if they were legitimate.  In the last decade, police in Rio de Janeiro abruptly raided these schools arresting the owners and closing the schools. We examine individuals earnings before the diploma was initially acquired, after the diploma was awarded, and after the police closed the school. We find an earnings increase when the degree is awarded that is similar to students who attended legitimate high schools. The additional earnings are not revoked after the raids. While the evidence is consistent with a signaling model, we discuss other potential explanations.