Another Empty Promise of Grade Retention? Peer Effects of Classmate Retention

Grade retention is a common but costly educational practice and studies have repeatedly shown that, in many contexts, it offers no academic benefit to retained students. A remaining justification for its continued use is the presumed benefit for the promoted peers from whose class the retained student was removed. This study tests that assumption using longitudinal data from the German National Educational Panel Study (NEPS) and a difference-in-differences approach, focusing on grades and competencies from Grades 1 to 9. Results predominantly yield null findings, with a small positive effect on mathematics grades in lower secondary education (0.08–0.09 SD) as the only exception. Overall, our findings do not provide support for presumed peer benefits as a justification for grade retention.