The Cost of Grade Retention

Marco Manacorda

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: This paper uses administrative longitudinal micro data on the universe of Junior High schoolstudents in Uruguay to measure the effect of grade failure on students' subsequent schooloutcomes. Exploiting the discontinuity induced by a rule establishing automatic grade failurefor pupils missing more than 25 days, I show that grade failure leads to substantial drop-outand lower educational attainment even after 4 to 5 years since the time when failure firstoccurred. Complementary evidence based on a change in the regime of grade promotion leadsto very similar conclusions, suggesting that non-random sorting around the discontinuitypoint is unlikely to drive my results.

Keywords: grade retention; school drop-out; regression discontinuity; sorting (search for similar items in EconPapers)
JEL-codes: I21 I22 J20 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-edu, nep-lab and nep-ure
Date: Written 2008-07
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