IZA DP No. 13488: A Signal of (Train)Ability? Grade Repetition and Hiring Chances
revised version published in: Journal of Economic Behavior & Organization 2021, 188, 867 - 878
This article contributes to the nascent literature on the effect of grade retention in school on later labour market success. A field experiment is conducted to rule out the endogeneity of both outcomes. More concretely, various treatments of grade retention are randomly assigned to fictitious rÃƒÆ’Ã‚Â©sumÃƒÆ’Ã‚Â©s sent in application to real vacancies. Overall, grade retention does not significantly affect positive call-back by employers. However, when narrowing in on vacancies for occupations where on-the-job training is important, job candidates with a record of grade retention are 16% less likely to receive a positive reaction. This finding is consistent with Queuing theory.