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How the Timing of Grade Retention Affects Outcomes: Identification and Estimation of Time-Varying Treatment Effects

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Abstract

Increasingly, grade retention is viewed as an important alternative to social promotion, yet evidence to date is unable to disentangle how the effect of grade retention varies by abilities and over time. The key challenge is differential selection of students into retention across grades and by abilities. Because existing quasi-experimental methods cannot address this question, we develop a new strategy that is a hybrid between a control function and a generalization of the fixed effects approach. Applying our method to nationally-representative, longitudinal data, we find evidence of dynamic selection into retention and that the treatment effect of retention varies considerably across grades and unobservable abilities of students. Our strategy can be applied more broadly to many time-varying or multiple treatment settings.

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File URL: http://economics.uwo.ca/cibc/workingpapers_docs/wp2011/Fruehwirth_Navarro_Takahashi07.pdf
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Bibliographic Info

Paper provided by University of Western Ontario, CIBC Centre for Human Capital and Productivity in its series University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers with number 20117.

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Date of creation: 2011
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Handle: RePEc:uwo:hcuwoc:20117

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Postal: CIBC Centre for Human Capital and Productivity, Social Science Centre, University of Western Ontario, London, Ontario, Canada N6A 5C2
Phone: 519-661-2111 Ext.85244
Web page: http://economics.uwo.ca/research/research_papers/cibc_workingpapers.html

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Keywords: time-varying treatments; dynamic selection; grade retention; factor analysis;

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References

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  1. Heckman, James & Navarro-Lozano, Salvador, 2003. "Using matching, instrumental variables and control functions to estimate economic choice models," Working Paper Series 2003:4, IFAU - Institute for Evaluation of Labour Market and Education Policy.
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  12. Carneiro, Pedro & Hansen, Karsten & Heckman, James, 2003. "Estimating distributions of treatment effects with an application to the returns to schooling and measurement of the effects of uncertainty on college choice," Working Paper Series 2003:9, IFAU - Institute for Evaluation of Labour Market and Education Policy.
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  17. Stéphane Bonhomme & Jean-Marc Robin, 2008. "Generalized nonparametric deconvolution with an application to earnings dynamics," CeMMAP working papers CWP03/08, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
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  20. Cattaneo, Matias D., 2010. "Efficient semiparametric estimation of multi-valued treatment effects under ignorability," Journal of Econometrics, Elsevier, vol. 155(2), pages 138-154, April.
  21. S. A. Murphy, 2003. "Optimal dynamic treatment regimes," Journal of the Royal Statistical Society Series B, Royal Statistical Society, vol. 65(2), pages 331-355.
  22. Yingyao Hu & Susanne M. Schennach, 2008. "Instrumental Variable Treatment of Nonclassical Measurement Error Models," Econometrica, Econometric Society, vol. 76(1), pages 195-216, 01.
  23. Pedro Carneiro & Karsten T. Hansen & James J. Heckman, 2003. "Estimating Distributions of Treatment Effects with an Application to the Returns to Schooling and Measurement of the Effects of Uncertainty on College," NBER Working Papers 9546, National Bureau of Economic Research, Inc.
  24. Stephanie Riegg Cellini & Fernando Ferreira & Jesse Rothstein, 2010. "The Value of School Facility Investments: Evidence from a Dynamic Regression Discontinuity Design," The Quarterly Journal of Economics, MIT Press, vol. 125(1), pages 215-261, February.
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Cited by:
  1. Mai Seki, 2013. "Heterogeneous Returns to U.S. College Selectivity and the Value of Graduate Degree Attainment," Working Papers 13-46, Bank of Canada.
  2. Robert J. Gary-Bobo & Marion Gousse & Jean-Marc Robin, 2014. "Grade Retention and Unobserved Heterogeneity," CESifo Working Paper Series 4846, CESifo Group Munich.
  3. Baert, Stijn & Cockx, Bart, 2013. "Pure Ethnic Gaps in Educational Attainment and School to Work Transitions: When Do They Arise?," IZA Discussion Papers 7262, Institute for the Study of Labor (IZA).
  4. Robert Gary-Bobo & Marion Gousse & Jean-Marc Robin, 2014. "Grade retention and unobserved heterogeneity," CeMMAP working papers CWP14/14, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.

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