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Learning Through Repetition? A Dynamic Evaluation of Grade Retention in Portugal
Petra E. Todd
J - Labor and Demographic Economics
High grade retention rates are a matter of much worldwide debate. Although some students learn more with extended school time, others get discouraged and drop out. This paper develops and implements a dynamic modeling approach for estimating retention effects in Portuguese high schools where over 40% of students were retained. The estimated model is used to simulate academic achievement under existing and alternative retention policies. Results show that the current policy’s average impact on 12th grade math and Portuguese test scores is positive (0.2-0.5 s.d.), but it substantially increases dropout. We solve for the optimal policy to maximize lifetime earnings.