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Like active labour market programmes (ALPMs), grade repetition could generate two types of effects. Better/worse outcomes due to programme participation (i.e. the fact that pupils repeat a particular grade). This is what the existing literature on grade repetition has focused on. Another potential outcome is the 'threat' effect of grade repetition. Pupils and/or their family could make significant efforts to avoid grade repetition and its important opportunity cost. Learning effort by pupils could be a function of the risk of grade repetition. This paper attempts to assess that relationship by exploiting a reform introduced in 2001 in the French-Speaking Community of Belgium. That year, policy makers reinstated the possibility to repeat grade 7, putting an end to the regime of "social promotion" that existed before. We use data from two waves of the PISA study (corresponding to periods before and after the reform) to evaluate the medium-term effects of the reform. The first measure of performance we consider is the position in the curriculum (or grade) reached at the age of 15, and we show that it deteriorated after 2001. We also consider the reform's impact on test scores. Focusing on grade 10, we fail to verify the necessary condition for grade repetition threat to lead to higher test scores. The tentative conclusion is that an enhanced threat of grade retention after 2001 did not lead to better outcomes, even among the segments of the population the most at risk of grade repetition.

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What follows is an exercise aimed at estimating peer effects' impact on science and math test scores of secondary school students surveyed in 1995 by the International Education Agency across OECD countries. It is also to discuss their importance for educational policy. particularly regarding the highly sensitive issue of ability-grouping. Using this unique international database. we assess the magnitude of the peer effect relative to more traditional inputs. Referring the education policy stakes, we control for the presence of increasing or decreasing return; We also check for cross effects in order to determine whether peer effects matter more to low or high SES pupils, and whether they final impact on achievement is affected by the underlying level of heterogeneity whithin the group. Using a methodology which a priori accounts for the clustering of the data within countries and schools/classrooms -i.e. fixed/random effect or hierarchichal model --our analysis indicates that peer effects are strong determinants of both math and science achievement relative to individual SES and other school inputs. The presence of increasing of decreasing returns is not obvious. But we find systematic evidence that low-ability pupils are more sensitive to peer group characteristics. By contrast, we also find that --for a given level of the peer effect --higher heterogeneity comes a certain cost. In brief, our results provide no systematic evidence regarding grouping policies.