Grade retention practices are at the forefront of the educational debate. In this paper, we use PISA 2009 data for Spain to measure the effect of grade retention on students�achievement.
One important problem when analyzing this question is that school outcomes and the propensity to repeat a grade are likely to be determined simultaneously. We address this problem by estimating a Switching Regression Model. We find that grade retention has a negative impact on educational outcomes, but we confirm the importance of endogenous selection, which makes observed differences between repeaters and non-repeaters appear 14.6% lower than they actually are. The effect on PISA scores of repeating is much smaller (-10% of non-repeaters�average) than the counterfactual reduction that non-repeaters would suffer had they been retained as repeaters (-24% of their average).
Furthermore, those who repeated a grade during primary education suffered more than those who repeated a grade of secondary school, although the effect of repeating at both times is, as expected, much larger.
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