Double Toil and Trouble: Grade Retention and Academic Performance

Abstract

Most recent available evidence points to the scarce efficacy of grade retention for levelling the performance of students. Yet, the fact that many countries persist in applying this measure reflects longstanding traditions, cultural factors and social beliefs as well, it would seem, the lack of robust empirical evidence to do otherwise. We contribute to the literature by analysing the impact of grade retention on the reading competencies of lower secondary school students in Spain, a country where almost one out of every three students will repeat at least one grade by age 16. We overcome the absence of longitudinal data by creating a pseudo-panel that combines microdata from two international assessments, PIRLS and PISA. Having controlled for reverse causality, our study confirms the negative and heterogeneous impact of grade retention. This paper provides new evidence of the pressing need to rethink this educational policy, and our results highlight the importance of early intervention as opposed to only employing remedial measures.

Keywords: Grade retention, academic achievement, PISA, PIRLS

JEL Classification: I21, I28, I24