The Impact of Immigrant Concentration in Schools on Grade Retention in Spain: a Difference-in-Differences Approach

Since the late 1990s, Spain has played host to a sizeable flow of immigrants who have been absorbed into the compulsory stage of the education system. In this paper, our aim is to assess the impact of that exogenous increase in the number of immigrant students from 2003 to 2009 on grade retention using Spanish data from PISA 2003 and 2009. For this purpose, we use the difference-in-differences method (DiD), capable of detecting whether the immigrant concentration has had a significant effect on student performance. Within this framework, the control group will be the schools without sampled immigrants from 2003 to 2009 and the treatment group will be schools with immigrant students that experienced a significant increase of immigrants throughout this period. As the percentage of immigrants is different across schools, the DiD methodology is adapted to deal with a dose treatment. What we are looking for then is not simply the average effect of there being or not being foreign students at the school, but the effect of their concentration. In this way, the effect of immigrants joining schools can be isolated and estimated through a DiD dose estimator controlling by other educational variables that also influence school performance. Our results evidenced that their arrival does not on average decrease school promotion rates with respect to 2003 and is even beneficial to native students. Although the concentration of immigrant students at the same school does have a negative impact on immigrant students generating more grade retention, native students are unaffected until concentrations of immigrant students are higher.