"Grade retention has been controversial for many years, and current calls to end social promotion have lent new urgency to this issue.... Analyzing data from the US Early Childhood Longitudinal Study Kindergarten cohort with the technique of multilevel propensity score stratification, we find no evidence that a policy of grade retention in kindergarten improves average achievement in mathematics or reading. Nor do we find evidence that the policy benefits children who would be promoted under the policy. However, the evidence does suggest that children who are retained learn less than they would have had they instead been promoted. The negative effect of grade retention on those retained has little influence on the overall mean achievement of children attending schools with a retention policy because the fraction of children retained in those schools is quite small. Nevertheless, the effect of retention on the retainees is considerably large."Source: Educational Evaluation and Policy Analysis
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