So in the educational setting it means to hold your child back a year? Am I understanding correctly that this is often done so the kids will be a better football player?
Boggling.
Note that the term originated in the context of college sports, not elementary school. [http://en.wikipedia.org/wiki/Redshirt_(college_sports) ]
There are lots of reasons parents might choose to send a kid with a close-to-the-cutoff birthday to school a year later than they were eligible, just as there are lots of reasons parents might want to send a kid with a close-to-the-cutoff birthday to school a year earlier than they were eligible. Sports specifically isn't a typical reason, but size in general, social maturity, and academic readiness are.
