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Grade retention and unobserved heterogeneity

2016; Wiley; Volume: 7; Issue: 3 Linguagem: Inglês

10.3982/qe524

1759-7331

Robert Gary‐Bobo, Marion Goussé, Jean‐Marc Robin,

Higher Education Research Studies

Quantitative EconomicsVolume 7, Issue 3 p. 781-820 Original ArticlesOpen Access Grade retention and unobserved heterogeneity Robert J. Gary-Bobo, Robert J. Gary-Bobo robert.gary-bobo@ensae.fr CREST, ENSAESearch for more papers by this authorMarion Goussé, Marion Goussé marion.gousse@gmail.com Department of Economics, Université LavalSearch for more papers by this authorJean-Marc Robin, Jean-Marc Robin jeanmarc.robin@sciencespo.fr Department of Economics, Sciences Po University College London We thank Costas Meghir, Petra Todd, and three anonymous referees for useful comments. Robin gratefully acknowledges financial support from the Economic and Social Research Council through the ESRC Centre for Microdata Methods and Practice, Grant RES-589-28-0001, and from the European Research Council (ERC), Grant ERC-2010-AdG-269693-WASP. Gary-Bobo's research is supported by Labex Ecodec (ANR-11-LABX-0047) and Investissements d'Avenir (ANR-11-IDEX-0003). Robin and Gary-Bobo gratefully acknowledge support from the Agence Nationale de la Recherche (ANR) white project "Econométrie des redoublements." Search for more papers by this author Robert J. Gary-Bobo, Robert J. Gary-Bobo robert.gary-bobo@ensae.fr CREST, ENSAESearch for more papers by this authorMarion Goussé, Marion Goussé marion.gousse@gmail.com Department of Economics, Université LavalSearch for more papers by this authorJean-Marc Robin, Jean-Marc Robin jeanmarc.robin@sciencespo.fr Department of Economics, Sciences Po University College London We thank Costas Meghir, Petra Todd, and three anonymous referees for useful comments. Robin gratefully acknowledges financial support from the Economic and Social Research Council through the ESRC Centre for Microdata Methods and Practice, Grant RES-589-28-0001, and from the European Research Council (ERC), Grant ERC-2010-AdG-269693-WASP. Gary-Bobo's research is supported by Labex Ecodec (ANR-11-LABX-0047) and Investissements d'Avenir (ANR-11-IDEX-0003). Robin and Gary-Bobo gratefully acknowledge support from the Agence Nationale de la Recherche (ANR) white project "Econométrie des redoublements." Search for more papers by this author First published: 14 November 2016 https://doi.org/10.3982/QE524Citations: 10 AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Abstract We study the treatment effect of grade retention using a panel of French junior high-school students, taking unobserved heterogeneity and the endogeneity of grade repetitions into account. We specify a multistage model of human-capital accumulation with a finite number of types representing unobserved individual characteristics. Class-size and latent student-performance indices are assumed to follow finite mixtures of normal distributions. Grade retention may increase or decrease the student's knowledge capital in a type-dependent way. Our estimation results show that the average treatment effect on the treated (ATT) of grade retention on test scores is positive but small at the end of grade 9. Treatment effects are heterogeneous: we find that the ATT of grade retention is higher for the weakest students. We also show that class size is endogenous and tends to increase with unobserved student ability. 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