The Impact of Grade Retention on Juvenile Crime

This paper studies the causal effect of grade retention in primary school on juvenile crime in Chile. Implementing a fuzzy regression discontinuity design, we find that repeating an early grade in primary school decreases the probability of committing a crime as a juvenile by 14.5 percentage points. By estimating and simulating a dynamic model, we show that the RD result is mainly driven by two mechanisms related to the timing of grade retention. First, grade retention in early grades decreases the probability of grade retention in late primary school grades. Second, late grade retention in primary education has a positive and more relevant effect on crime than the direct effect in early grades. Our findings support the argument that, conditional on the decision to keep grade retention as an ongoing policy, the optimal implementation at the margin is to retain students in early grades in order to avoid retention in later ones.