Don't Hold Back? The Effect of Grade Retention on Student Achievement

This study analyzes the effect of age-based retention on school achievement at different stages of education. I estimate an instrumental variable model, using the predicted probability of retention given month of birth as an instrument, while simultaneously accounting for the effect of month of birth on maturity at the time of testing. The analysis further assesses heterogeneity in retention effects by achievement, by background characteristics, and by type of skill. Using international data from multiple waves of the PISA international assessment test, I find that grade retention in primary school harms student achievement across the distribution, while delayed school entry can produce positive results for those at the lower end. The identified local average treatment effect indicates that letting students retain in primary school because of a low relative age is harmful for their future school achievement.