IDEAS home Printed from https://ideas.repec.org/p/zbw/zewdip/19059.html
   My bibliography  Save this paper

Strategic grade retention

Author

Listed:
  • Bach, Maximilian

Abstract

Most school systems grant teachers and school principals considerable discretion in grade retention decisions. This paper argues that schools can exploit this discretion by selectively retaining students to reduce class size which potentially has important implications for public spending on education and affected students. To this end, I build a model in which class size is subject to a class size cap, with teachers and school principals determining the share of students to be retained. This leads to a set of empirical predictions that can be tested with minimal data requirements. Testing these predictions using administrative data for German primary schools yields strong evidence of schools strategically using grade retention to reduce class size.

Suggested Citation

  • Bach, Maximilian, 2019. "Strategic grade retention," ZEW Discussion Papers 19-059, ZEW - Leibniz Centre for European Economic Research.
  • Handle: RePEc:zbw:zewdip:19059
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/211481/1/1687471509.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Argaw, Bethlehem A. & Puhani, Patrick A., 2018. "Does class size matter for school tracking outcomes after elementary school? Quasi-experimental evidence using administrative panel data from Germany," Economics of Education Review, Elsevier, vol. 65(C), pages 48-57.
    2. Wo[ss]mann, Ludger & West, Martin, 2006. "Class-size effects in school systems around the world: Evidence from between-grade variation in TIMSS," European Economic Review, Elsevier, vol. 50(3), pages 695-736, April.
    3. Maximilian Bach & Stephan Sievert, 2019. "Birth Cohort Size Variation and the Estimation of Class Size Effects," Discussion Papers of DIW Berlin 1817, DIW Berlin, German Institute for Economic Research.
    4. Miguel Urquiola & Eric Verhoogen, 2009. "Class-Size Caps, Sorting, and the Regression-Discontinuity Design," American Economic Review, American Economic Association, vol. 99(1), pages 179-215, March.
    5. Schwerdt, Guido & West, Martin R. & Winters, Marcus A., 2017. "The effects of test-based retention on student outcomes over time: Regression discontinuity evidence from Florida," Journal of Public Economics, Elsevier, vol. 152(C), pages 154-169.
    6. 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.
    7. Brian A. Jacob & Steven D. Levitt, 2003. "Rotten Apples: An Investigation of the Prevalence and Predictors of Teacher Cheating," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(3), pages 843-877.
    8. Eren, Ozkan & Depew, Briggs & Barnes, Stephen, 2017. "Test-based promotion policies, dropping out, and juvenile crime," Journal of Public Economics, Elsevier, vol. 153(C), pages 9-31.
    9. Brian A. Jacob & Lars Lefgren, 2004. "Remedial Education and Student Achievement: A Regression-Discontinuity Analysis," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 226-244, February.
    10. Bart Cockx & Matteo Picchio & Stijn Baert, 2019. "Modeling the effects of grade retention in high school," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 34(3), pages 403-424, April.
    11. Robert J. Gary-Bobo & Mohamed-Badrane Mahjoub, 2013. "Estimation of Class-Size Effects, Using "Maimonides' Rule" and Other Instruments: the Case of French Junior High Schools," Annals of Economics and Statistics, GENES, issue 111-112, pages 193-225.
    12. Maximilian Bach & Stephan Sievert, 2018. "Kleinere Grundschulklassen können zu besseren Leistungen von SchülerInnen führen," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 85(22), pages 465-472.
    13. Brian A. Jacob & Lars Lefgren, 2009. "The Effect of Grade Retention on High School Completion," American Economic Journal: Applied Economics, American Economic Association, vol. 1(3), pages 33-58, July.
    14. Marco Manacorda, 2012. "The Cost of Grade Retention," The Review of Economics and Statistics, MIT Press, vol. 94(2), pages 596-606, May.
    15. repec:adr:anecst:y:2013:i:111-112:p:8 is not listed on IDEAS
    16. Joshua D. Angrist & Victor Lavy & Jetson Leder-Luis & Adi Shany, 2019. "Maimonides' Rule Redux," American Economic Review: Insights, American Economic Association, vol. 1(3), pages 309-324, December.
    17. 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.
    18. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    19. Cohen-Zada, Danny & Gradstein, Mark & Reuven, Ehud, 2013. "Allocation of students in public schools: Theory and new evidence," Economics of Education Review, Elsevier, vol. 34(C), pages 96-106.
    20. Jacob, Brian A., 2005. "Accountability, incentives and behavior: the impact of high-stakes testing in the Chicago Public Schools," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 761-796, June.
    21. Robert Gary-Bobo & Jean-Marc Robin & Marion Goussé, 2016. "Grade Retention and Unobserved Heterogeneity," Post-Print hal-03572141, HAL.
    22. Fama, Eugene F, 1980. "Agency Problems and the Theory of the Firm," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 288-307, April.
    23. Oecd, 2011. "When Students Repeat Grades or Are Transferred Out of School: What Does it Mean for Education Systems?," PISA in Focus 6, OECD Publishing.
    24. Robert J. Gary‐bobo & Badrane Mohamed Mahjoub, 2013. "Estimation of Class-Size Effects, Using "Maimonides' Rule" and Other Instruments: The Case of French Junior High Schools," Post-Print hal-03565399, HAL.
    25. repec:hal:spmain:info:hdl:2441/4po7er2pp49baoh37bjdkluouu is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. 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.
    3. Maximilian Bach & Stephan Sievert, 2019. "Birth Cohort Size Variation and the Estimation of Class Size Effects," Discussion Papers of DIW Berlin 1817, DIW Berlin, German Institute for Economic Research.
    4. Zhang, Shiying & Huang, Ao, 2022. "The long-term effects of automatic grade promotion on child development," China Economic Review, Elsevier, vol. 74(C).
    5. Figlio, D. & Karbownik, K. & Salvanes, K.G., 2016. "Education Research and Administrative Data," Handbook of the Economics of Education,, Elsevier.
    6. Servaas van der Berg & Gabrielle Wills & Rebecca Selkirk & Charles Adams & Chris van Wyk, 2019. "The cost of repetition in South Africa," Working Papers 13/2019, Stellenbosch University, Department of Economics.
    7. Ron Diris, 2017. "Don't Hold Back? The Effect of Grade Retention on Student Achievement," Education Finance and Policy, MIT Press, vol. 12(3), pages 312-341, Summer.
    8. Luke C. Miller & Daphna Bassok, 2019. "The Effects of Universal Preschool on Grade Retention," Education Finance and Policy, MIT Press, vol. 14(2), pages 149-177, Spring.
    9. repec:hal:spmain:info:hdl:2441/6tve7u8o9k9dv8fanl7utalotr is not listed on IDEAS
    10. repec:spo:wpmain:info:hdl:2441/6tve7u8o9k9dv8fanl7utalotr is not listed on IDEAS
    11. Schwerdt, Guido & West, Martin R. & Winters, Marcus A., 2017. "The effects of test-based retention on student outcomes over time: Regression discontinuity evidence from Florida," Journal of Public Economics, Elsevier, vol. 152(C), pages 154-169.
    12. Eren, Ozkan & Depew, Briggs & Barnes, Stephen, 2017. "Test-based promotion policies, dropping out, and juvenile crime," Journal of Public Economics, Elsevier, vol. 153(C), pages 9-31.
    13. Baert, Stijn & Picchio, Matteo, 2021. "A signal of (Train)ability? Grade repetition and hiring chances," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 867-878.
    14. Joshua D. Angrist & Erich Battistin & Daniela Vuri, 2017. "In a Small Moment: Class Size and Moral Hazard in the Italian Mezzogiorno," American Economic Journal: Applied Economics, American Economic Association, vol. 9(4), pages 216-249, October.
    15. 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.
    16. Álvaro Choi & María Gil & Mauro Mediavilla & Javier Valbuena, 2016. "Double toil and trouble: grade retention and academic performance," Working Papers 2016/7, Institut d'Economia de Barcelona (IEB).
    17. Díaz, Juan & Grau, Nicolás & Reyes, Tatiana & Rivera, Jorge, 2021. "The impact of grade retention on juvenile crime," Economics of Education Review, Elsevier, vol. 84(C).
    18. Marion Gousse, 2014. "Marriage Market and Intra-Household Allocation. Essays in Economics of Family and Education," Sciences Po publications info:hdl:2441/6tve7u8o9k9, Sciences Po.
    19. Ferreira Sequeda, Maria & Golsteyn, Bart & Parra Cely, Sergio, 2018. "The effect of grade retention on secondary school performance: Evidence from a natural experiment," ROA Research Memorandum 003, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    20. Gian Paolo Barbetta & Giuseppe Sorrenti & Gilberto Turati, 2021. "Multigrading and Child Achievement," Journal of Human Resources, University of Wisconsin Press, vol. 56(3), pages 940-968.
    21. 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.
    22. Tafreschi, Darjusch & Thiemann, Petra, 2016. "Doing it twice, getting it right? The effects of grade retention and course repetition in higher education," Economics of Education Review, Elsevier, vol. 55(C), pages 198-219.

    More about this item

    Keywords

    Grade retention; Class size; Incentives;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • I29 - Health, Education, and Welfare - - Education - - - Other

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:zewdip:19059. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zemande.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.