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Grade retention and unobserved heterogeneity

Author

Listed:
  • Robert J. Gary‐Bobo
  • Marion Goussé
  • Jean‐Marc Robin

Abstract

We study the treatment effect of grade retention using a panel of French junior high‐school students, taking unobserved heterogeneity and the endogeneity of grade repetitions into account. We specify a multistage model of human‐capital accumulation with a finite number of types representing unobserved individual characteristics. Class‐size and latent student‐performance indices are assumed to follow finite mixtures of normal distributions. Grade retention may increase or decrease the student's knowledge capital in a type‐dependent way. Our estimation results show that the average treatment effect on the treated (ATT) of grade retention on test scores is positive but small at the end of grade 9. Treatment effects are heterogeneous: we find that the ATT of grade retention is higher for the weakest students. We also show that class size is endogenous and tends to increase with unobserved student ability. The average treatment effect of grade retention is negative, again with the exception of the weakest group of students. Grade repetitions reduce the probability of access to grade 9 of all student types.

Suggested Citation

  • Robert J. Gary‐Bobo & Marion Goussé & Jean‐Marc Robin, 2016. "Grade retention and unobserved heterogeneity," Quantitative Economics, Econometric Society, vol. 7(3), pages 781-820, November.
  • Handle: RePEc:wly:quante:v:7:y:2016:i:3:p:781-820
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    References listed on IDEAS

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    1. Dong, Yingying, 2010. "Kept back to get ahead? Kindergarten retention and academic performance," European Economic Review, Elsevier, vol. 54(2), pages 219-236, February.
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    6. Jane Cooley Fruehwirth & Salvador Navarro & Yuya Takahashi, 2016. "How the Timing of Grade Retention Affects Outcomes: Identification and Estimation of Time-Varying Treatment Effects," Journal of Labor Economics, University of Chicago Press, vol. 34(4), pages 979-1021.
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    Cited by:

    1. Jane Cooley Fruehwirth & Salvador Navarro & Yuya Takahashi, 2016. "How the Timing of Grade Retention Affects Outcomes: Identification and Estimation of Time-Varying Treatment Effects," Journal of Labor Economics, University of Chicago Press, vol. 34(4), pages 979-1021.
    2. Hugo Reis & Manuel Coutinho Pereira, 2014. "Grade retention during basic education in Portugal: determinants and impact on student achievement," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.

    More about this item

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • I2 - Health, Education, and Welfare - - Education

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