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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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    Cited by:

    1. Oliver Cassagneau-Francis, 2022. "Revisiting the Returns to Higher Education: Heterogeneity by Cognitive and Non-Cognitive Abilities," Sciences Po Economics Publications (main) hal-04067399, HAL.
    2. repec:ucl:cepeow:25-10 is not listed on IDEAS
    3. Javier Valbuena & Mauro Mediavilla & Álvaro Choi & María Gil, 2021. "Effects Of Grade Retention Policies: A Literature Review Of Empirical Studies Applying Causal Inference," Journal of Economic Surveys, Wiley Blackwell, vol. 35(2), pages 408-451, April.
    4. Bach, Maximilian, 2019. "Strategic grade retention," ZEW Discussion Papers 19-059, ZEW - Leibniz Centre for European Economic Research.
    5. Zhang, Shiying & Huang, Ao, 2022. "The long-term effects of automatic grade promotion on child development," China Economic Review, Elsevier, vol. 74(C).
    6. Hugo Reis & Emilio Borghesan, 2022. "Learning Through Repetition? A Dynamic Evaluation of Grade Retention in Portugal," Working Papers w202220, Banco de Portugal, Economics and Research Department.
    7. 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.
    8. Carmen Aina & Francesco Pastore, 2020. "Delayed Graduation and Overeducation in Italy: A Test of the Human Capital Model Versus the Screening Hypothesis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 152(2), pages 533-553, November.
    9. Léonard Moulin, 2023. "Do private schools increase academic achievement? Evidence from France," Education Economics, Taylor & Francis Journals, vol. 31(2), pages 247-274, March.
    10. Asma Benhenda, 2018. "What is the cost of grade retention?," DoQSS Working Papers 18-07, Quantitative Social Science - UCL Social Research Institute, University College London.
    11. Olivier De Groote, 2025. "Dynamic Effort Choice in High School: Costs and Benefits of an Academic Track," Journal of Labor Economics, University of Chicago Press, vol. 43(2), pages 467-502.
    12. 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.
    13. repec:ptu:bdpart:b201407 is not listed on IDEAS

    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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