By Shiying Zhang, Ao Huang

There have been numerous debates regarding the educational practice of grade retention and social promotion. This study analyzes the effect of an exogenous policy reform in China that abolishes grade retention during the compulsory education period. We exploit the staggered introduction of the reform across provinces and estimate a flexible difference-in-differences model that can capture the effect of exposure to the reform in different grades. The results indicate that abolishing grade retention significantly decreases the probability of junior high school completion, and most of these negative impacts are concentrated among students exposed to the reform in early grades. Moreover, rural children and boys are more likely to be negatively affected by the reform. Finally, we find that the reform increases the likelihood of later criminal behavior in early adulthood.

Unpublished paper, 2024.