1 Double toil and trouble: grade retention and academic performance in Spain Álvaro Choi a , María Gil b , Mauro Mediavilla c & Javier Valbuena d a Universitat de Barcelona & IEB b Universidad Autónoma de Madrid c Universitat de València & IEB d Correspondence author: María Gil Izquierdo. Department of Applied Economics. Faculty of Economics and Business. Universidad Autónoma de Madrid. Cantoblanco.28049, Madrid. Email: Universitat de Girona maria.gil@uam.es Abstract Grade retention is widely applied in the Spanish educational system, where almost 1 out of every 3 students have repeated at least one course by age 16. In that sense, Spain can be classified among those countries with a comprehensive educational system, where grade retention is applied as the main policy for levelling the performance of students. However, part of the variation in the rates of grade retention at an international level may also be explained by social believes and cultural factors. Several arguments are used for defending the use of grade retention. First, it provides students some extra time for maturing; second, it is a policy which is applied equally to all students; third, it may be a deterrent to low performance; finally, it may enhance overall performance as it transmits students a culture of effort. Those who stand against grade retention emphasize its inefficacy, its high cost and its negative impact on the student’s level of motivation and may also generate discipline issues in schools. However, while most of the empirical evidence available for other countries shows the scarce effectiveness of grade retention for enhancing academic performance, this exercise is still to be performed for Spain. Most studies analyzing the Spanish case cannot estimate precisely the effect of grade retention on academic achievement due to the lack of data rich enough for tackling methodological issues such as reverse causation. In this paper we attempt to overcome this limitation creating a pseudo-panel which combines microdata from PIRLS-2006 and PISA- 2012. Our study provides evidence about the negative impact of grade retention and the importance of previous achievement. Therefore, this study underlines the importance of early intervention at primary school, or even before, in order to identify students at risk of grade retention. Keywords: grade retention; academic achievement; PISA; PIRLS. Acknowledgements: This research has received financial support from the Areces Foundation.