Effects of Grade Retention Policies: A Literature Review of Empirical Studies Applying Causal Inference

Abstract

The identification of the causal effects of grade retention policies is of enormous relevance for researchers and policymakers alike. Taking advantage of the availability of more detailed longitudinal datasets, researchers have been able to apply different identification strategies that address the classical problems of selection bias and unobserved heterogeneity that have plagued previous studies on the effect of retention. We present a systematic literature review of empirical studies aiming to unveil the causal effects of retention. This study underlines the need to consider and evaluate different kinds of grade retention polices as their effects vary depending on several dimensions (such as timing of the policy, comparison groups, length of the effects or institutional settings). According to the results of our review, we conclude that grade retention is unlikely to be an efficient policy as the costs associated to the policy can easily outweigh the potential (weak) benefits of retention. It is therefore necessary to consider alternative policies to retention, or policies that can be used in combination with it, in order to enhance the performance of low achievers, in particular those students at risk characterized by a low ability profile.