The Effect of Grade Retention on High School Completion

Low-achieving students in many school districts are retained in a grade in order to allow them to gain the academic or social skills that teachers believe are necessary to succeed academically. In this paper, we use plausibly exogenous variation in retention generated by a test-based promotion policy to assess the causal impact of grade retention on high school completion. We find that retention among younger students does not affect the likelihood of high school completion, but that retaining low-achieving eighth grade students in elementary school substantially increases the probability that these students will drop out of high school. In most developing countries and some developed countries, students are promoted from one grade to the next based on their academic performance. This was once the case in the United States. Starting in the mid-1960s, however, educators became concerned that retention (i.e., the practice of requiring students to repeat a grade) adversely impacts the social, emotional and cognitive development of children and leads at-risk students to drop out of school. Since this time, grade retention has gone in and out of vogue among educators in the United States, although it has remained relatively rare since the early 1960s. The recent push for educational accountability, however, has brought this issue back to the forefront of education policy. In an effort to improve student achievement, many states have recently implemented policies that require elementary school children to meet explicit performance goals in order to be promoted. Indeed, nineteen states explicitly tie student promotion to performance on a state or district assessment (ECS State Notes 2000) and three of the largest school districts in the country – New York City, Los Angeles and Chicago – have similar policies. These policies are intended largely to provide incentives to students, teachers