The Impact of Encouraging Social Promotion

Abstract

I study the effects of encouraging social promotion in the context of a policy in Colombia that capped the number of failing students at 5% of the total school enrollment. I show that this reform decreased failure rates by 10 percentage points in schools with high initial failure. To estimate the impacts on school dropout and student academic achievement, I exploit variation in the extent to which the 5% cap was binding across schools based on their pre-policy rates. I find that average math and language test scores are lower for cohorts that had more years of exposure to the social promotion regime. In addition, I find that dropout rates decreased by 25%, suggesting an overall ambiguous effect of this policy. I provide suggestive evidence that the impacts might be driven by both a composition and an incentive effect.