Abstract
This paper examines the effect of automatic grade promotion on academic achievement in 1993 public primary schools in Brazil. A difference-in-differences approach that exploits variation over time and across schools in the grade promotion regime allows the identification of the treatment effect of automatic promotion. I find a negative and significant effect of about 7% of a standard deviation on math test scores. I provide evidence in support of the interpretation of the estimates as a disincentive effect of automatic promotion. The findings contribute to the understanding of retention policies by focussing on the ex-ante effect of repetition and are important for more complete cost–benefit considerations of grade retention.
•I assess the effect of automatic grade promotion on student performance in Brazil.•I exploit time variation of the policy adoption across schools for identification.•I find a negative effect of automatic promotion on student performance.•I provide evidence for an interpretation of the estimates as disincentive effect.•The paper fills a gap in the literature by considering ex-ante effects of retention.
