I mean, from what I understand, schools just plain do not hold anyone back because they fail...they just continue to promote them on to the next grade regardless of their level of learning the material.
Depends on the school district, around here they can only hold them back once, then they have to advance them. It isn't about self esteem, not entirely anyway, if the kids don't do well (don't pass), the state cuts funding and fucks it up for everyone. Fuck up too much, and the school has to close, overloading the other schools and the slow downward spiral continues. Teacher salaries are also based on standardized test scores; which is extra fun if you teach special needs kids who either don't take them or cannot do that well. The state of affairs in the public school system here is beyond reckoning, and every "attempt" to fix it just seems to make it worse.