American Economic Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
Early Grade Retention Harms Adult Earnings
American Economic Journal: Applied Economics
(pp. 276–308)
Abstract
This paper provides new causal evidence on the effects of grade retention on educational attainment, behavioral outcomes, and labor market performance by analyzing Texas's reading test–based retention policy. Using a fuzzy regression discontinuity design, I find that third-grade retention significantly reduces annual earnings at age 26 by $3,477 (19 percent). While temporarily improving test scores, retention increases absenteeism, violent behavior, and juvenile crime, and reduces the likelihood of high school graduation. Moreover, retained students exhibit higher community college enrollment but lower public university attendance, though neither estimate is statistically significant.Citation
Zhong, Jiee. 2026. "Early Grade Retention Harms Adult Earnings." American Economic Journal: Applied Economics 18 (4): 276–308. DOI: 10.1257/app.20230121Additional Materials
JEL Classification
- D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
- H75 State and Local Government: Health; Education; Welfare; Public Pensions
- I21 Analysis of Education
- I26 Returns to Education
- I28 Education: Government Policy
- J31 Wage Level and Structure; Wage Differentials