One of a series of studies examining Louisiana's compensatory education program, this study investigated four assumptions upon which a skill-specific intervention program was based. Framed as questions, these assumptions are: (1) Is retention effective for students who do not know basic content for a given grade level? (2) When is retention most effective among students who fail to meet prescribed minimum performance standards at each grade level? (3) How do students who have not attained minimum skills required at their grade level but who are promoted perform on the next level? (4) Does early identification and skill-specific intervention prevent later difficulties? Data was obtained from elementary school students whose scores in Louisiana's 1982 Grade 2 Basic Skills Testing (BST) program indicated that they were qualified for compensatory education and who were tracked through 1983, 1984, and 1985. In 1983 promoted and retained subgroups emerged in the data, each of which was further divided on the same promoted/retained basis in 1984 and 1985. The report of results includes a summary of 1982-1985 BST attainment rates of initial 1982 qualifiers and a discussion of the effects of retention at various grade levels. Findings suggest that students have fewer difficulties attaining grade-level basic skills when they are both retained and promptly provided remediation. (RH)