The effect of grade repetition on school dropout. An identification based on differences among teachers.∗

This paper investigates the connection between grade repetition and school dropout. Household data is matched against a panel of academic test scores and the school career of each child inferred from the combined dataset. The potential endogeneity of grade repetition is corrected for using the differences among teacher attitude to repetition as an instrument for grade repetition. The results show a negative effect of the grade repetition decision on the probability of being enrolled at school the next year. ∗I am grateful to Sylvie Lambert, Marc Gurgand, Luc Behaghel and Christelle Dumas for their very useful comments and help on earlier versions of this paper; and to Christopher Sutcliffe for grammatical corrections. †Paris School of Economics and Lea-Inra 48, bd Jourdan, 75014 Paris, France. Tel: (33) 1.43.13.63.64. Fax: (33) 1.43.13.63.62. E-mail: [email protected]