National Association of School Psychs white paper on retention:
http://www.nasponline.org/about_nasp/positionpapers/whitepaper_graderetentionandsocialpromotion.pdfExecutive summary: data supports a small positive effect in the short term, and a negligible-to-non-existent effect long-term, with conflicting evidence for slight positive or slight negative effects on achievement and social-emotional functioning. The main anticipated negative outcome is increased risk of dropout.
The vast majority of the research is on low- and typically-performing students.