School Progression and the Grade Distribution of Students: Evidence from the Current Population Survey. Revision requested at the Journal of Business and Economic Statistics.
Abstract: Education researchers have long made inferences about grade retention from the grade distribution of same-aged students. Recent economics studies have followed suit. This paper examines the “below grade” proxy for retention using data from supplemental questionnaires administered in the October CPS. I estimate that 21% of non-repeaters are below grade, while 12% of repeaters are not. Misclassification attenuates regression coefficients by 35% when the proxy is an outcome and by 65% when it is a regressor. The latter figure is a benchmark, as classification and regression errors are arguably correlated. Biases are likely substantial in other surveys and time periods.
IZA Discussion Paper 1747 (September 2005)	PDF