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

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/chcp/workingpapers_docs/wp2011/Fruehwirth_Navarro_Takahashi07.pdf
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Paper provided by University of Western Ontario, Centre for Human Capital and Productivity (CHCP) in its series University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers with number 20117.

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Date of creation: 2011
Handle: RePEc:uwo:hcuwoc:20117
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Centre for Human Capital and Productivity (CHCP), 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/chcp_workingpapers.html

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