The Impact of Encouraging Social Promotion in Schools

Abstract

I study the effects of encouraging social promotion in the context of a school reform in Colombia
that capped the number of retained students at 5% of the total school enrollment. I show that
this policy decreased retention rates by almost 10 percentage points in schools with high initial
retention. I estimate the impact on educational outcomes exploiting variation in the extent to
which the cap was binding across schools based on their baseline rates. I find that dropout rates
decreased by 23% on average, particularly in basic secondary education, increasing the size of the
cohorts exposed to the policy. In addition, I provide suggestive evidence of negative impacts on
school quality as a result of both a composition and an incentive effect. The findings of my paper
are relevant for the growing number of countries that are shifting from strict retention rules to
more flexible social promotion regimes.

Keywords: Development economics; Economics of education; Program evaluation

JEL Classification: I21, I25, I28