Do second chances pay off? Evidence from a natural experiment with low-achieving students

Abstract

In several countries, students who fail high-stakes exams at the end of high school are faced with the choice of retaking or forgoing postsecondary education. We explore exogenous variation generated by a policy that imposed a performance threshold for admission into postsecondary education in Greece to estimate the effect of retaking exams on the exam performance and various measures of the quality of received offers. Using a fuzzy regression discontinuity design and novel administrative data, we find that low-achieving students who retake national exams improve their performance by around 0.6 standard deviation. We also find that they obtain higher quality postsecondary offers, thanks to improved performance and more ambitious re-application choices.