A cohort of 2nd-grade students provided comparisons of academic and social competence based on school retention/promotion decisions. Sample groups were (a) retained, (b) at risk for retention, (c) special education, and (d) promoted. Findings suggested most children with academic deficiencies are identified by schools early and are sorted into educational treatments differing in intensity that represent a continuum of competence. The authors provide empirical evidence counter to the assumptions that retained students have the requisite ability to catch up and have more problem behaviors than other low-achieving students. The relevance of high-stakes test scores for promotion/retention decisions and the parallels between schools' implementation of retention policy and implementation of regulations for identifying children with disabilities are included in the discussion.