Grade repetition reduces hiring chances for occupations where on-the-job training is important.

A new GLO Discussion Paper studies the effects of grade retention in school on later labor market success. For occupations where on-the-job training is important, job candidates with a record of grade retention are less likely to receive a positive reaction on job applications.

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GLO Discussion Paper No. 598, 2020

A Signal of (Train)ability? Grade Repetition and Hiring Chances – Download PDF
by Baert, Stijn & Picchio, Matteo

GLO Fellows Stijn Baert & Matteo Picchio

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Author Abstract: 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 résumés 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.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers). Complete list of all GLO DPs – downloadable for free.

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