Discussion paper
DP7889 The Cost of Grade Retention
This paper uses administrative longitudinal micro data on Junior High school students in Uruguay to measure the effect of grade failure on students? subsequent school outcomes. Exploiting the discontinuity induced by a rule establishing automatic grade failure for pupils with more than three failed subjects, I show that grade failure leads to substantial drop-out and lower educational attainment
even four to five years after grade failure first occurred.
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