Global Education Digest 2012 - International Reading Association

OPPORTUNITIES LOST: THE IMPACT OF GRADE REPETITION AND EARLY SCHOOL LEAVING
BOX 5. New OECD estimates for the costs of grade repetition
As part of the PISA 2009 background questionnaire, a number of 15-year-old students reported having
repeated a grade at least once in primary, lower secondary or upper secondary education. OECD has
introduced new estimates for the cost of grade repetition by adding up direct costs and opportunity
costs.
The direct costs are the costs for education systems to provide one additional year of education. The
opportunity costs are the costs of delaying students’ entry into the labour market by one additional
year. Two assumptions underlie the estimation of opportunity costs: i) repeaters attain at most the
lower secondary level (i.e. using annual labour costs for ISCED levels 0 to 2 for 25- to 64-year-olds and
the unemployment rate for “below upper secondary education”); and ii) repeaters attain the national
average education level (i.e. using the average annual labour costs for 25- to 64-year-olds and the
unemployment rate for “all levels of education”).
Estimation results indicate that the United States, Germany and Brazil have the three highest annual
costs for grade repetition. In these countries, the total annual cost for grade repetition is estimated at
20.8, 6.9 and 6.8 trillion purchase power parities in U.S. dollars (PPP US$) respectively. This represents
about 4% of total expenditure on primary and secondary education in the United States and about 9%
of costs in Brazil and Germany.
This estimation approach does not address the benefits of grade repetition or the costs of not having
grade repetition. For example, by repeating grades, students’ productivity and readiness for the labour
market might be improved. Education systems might have to implement relevant policies and invest
resources, such as extra tuition and subsidies for at-risk students, in order to avoid grade repetition,
but these costs are not incorporated into this estimation. In addition, these cost estimates are based
on the assumption that the most recent data on labour costs and unemployment rates will remain
stable over time.
Source: OECD (2011).
graduate, it is also possible to assess the internal
efficiency of the education system and compute
costs associated with the educational resources
consumed by repetition and early school leaving
(Cuadra and Fredriksen, 1992; UNESCO, 1980,
1998). Calculating indirect costs involves taking a
broader view, which includes potential human capital
development, economic returns and growth that
might be delayed or missed due to grade repetition
or early school leaving (Belfield, 2008; OECD, 2011).
Measures of school life expectancy net of repetition
indicate the average number of grades that a child
is likely to attain in school and help to inform about
the inefficiency of grade repetition from an economic
point of view. In a number of countries that reported
data, the years spent repeating grades make up a
substantial proportion of the output of education
systems (see Figure 24). Repetition can result in
two to three additional years in Burundi and Togo,
and almost one additional year or more in a range of
other countries, primarily in sub-Saharan Africa, but
also in Algeria, Morocco, Timor-Leste, Tunisia, Lao
People’s Democratic Republic and Uruguay. The years
spent repeating typically occur in primary education,
although grade repetition in lower secondary
education makes up more one-than half of the
additional years in Algeria, Tunisia and Uruguay.
It is important to note that each year of real additional
schooling (not due to repetition) could, on average,
increase individual earnings by 10% and lift annual
GDP growth globally by 0.37% (UNESCO, 2010). In
this regard, if resources spent on repeating a grade
were instead spent on enrolling new entrants into
school without reducing the quality of education,
annual GDP in countries like Burundi, Madagascar
and Malawi could grow potentially by 1.3%, 0.7%
and 0.6% respectively.
5.3 POLICY OPTIONS FOR REDUCING
REPETITION AND EARLY SCHOOL
LEAVING
It is difficult to design comprehensive policies to
reduce repetition, early school leaving and low
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